Optimal liability for terrorism
By: Darius Lakdawalla, Eric Talley
Contributors: Talley, Eric; National Bureau of Economic Research
Series: NBER working paper series -- working paper 12578; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12578.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "This paper analyzes the normative role for civil liability in aligning terrorism precaution incentives, when the perpetrators of terrorism are unreachable by courts or regulators.  We consider the strategic interaction among targets, subsidiary victims, and terrorists within a sequential, game-theoretic model.  The model reveals that, while an "optimal" liability regime indeed exists, its features appear at odds with conventional legal templates.  For example, it frequently prescribes damages payments from seemingly unlikely defendants, directing them to seemingly unlikely plaintiffs.  The challenge of introducing such a regime using existing tort law doctrines, therefore, is likely to be prohibitive.  Instead, we argue, efficient precaution incentives may be best provided by alternative policy mechanisms, such as a mutual public insurance pool for potential targets of terrorism, coupled with direct compensation to victims of terrorist attacks"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 10/13/2006.

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