We now address the three questions raised in the Challenge: How does a cap on liability affect

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We now address the three questions raised in the Challenge: How does a cap on liability affect a firm’s willingness to make a risky investment or to invest less than the optimal amount in safety? How does a cap affect the amount of risk borne by the firm and by the rest of society? How does a cap affect the amount of insurance that a firm buys?

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Microeconomics

ISBN: 9780133456912

7th Edition

Authors: Jeffrey M. Perloff

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