On One Parameter Functional Forms for Lorenz Curves

This paper shows that using a one-parameter functional form for the Lorenz curve is equivalent to ranking income distributions based on their Gini indices. Irrespective of the underlying data, the fitted Lorenz curves can never intersect. Circu mstances in which one-parameter Lorenz curves can safely be specified are identified and their policy relevance discussed.

Man and the Last Great Wilderness: Human Impact on the Deep Sea

The deep sea, the largest ecosystem on Earth and one of the least studied, harbours high biodiversity and provides a wealth of resources. Although humans have used the oceans for millennia, technological developments now allow exploitation of fisheries resources, hydrocarbons and minerals below 2000 m depth. The remoteness of the deep seafloor has promoted the disposal of residues and litter. Ocean acidification and climate change now bring a new dimension of global effects. Thus the challenges facing the deep sea are large and accelerating, providing a new imperative for the science community, industry and national and international organizations to work together to develop successful exploitation management and conservation of the deep-sea ecosystem. This paper provides scientific expert judgement and a semi-quantitative analysis of past, present and future impacts of human-related activities on global deep-sea habitats within three categories: disposal, exploitation and climate change. The analysis is the result of a Census of Marine Life – SYNDEEP workshop (September 2008). A detailed review of known impacts and their effects is provided. The analysis shows how, in recent decades, the most significant anthropogenic activities that affect the deep sea have evolved from mainly disposal (past) to exploitation (present). We predict that from now and into the future, increases in atmospheric CO2 and facets and consequences of climate change will have the most impact on deep-sea habitats and their fauna. Synergies between different anthropogenic pressures and associated effects are discussed, indicating that most synergies are related to increased atmospheric CO2 and climate change effects. We identify deep-sea ecosystems we believe are at higher risk from human impacts in the near future: benthic communities on sedimentary upper slopes, cold-water corals, canyon benthic communities and seamount pelagic and benthic communities. We finalise this review with a short discussion on protection and management methods

The Principal-Agent Model When Agents Can Make Mistakes

This paper examines the principal-agent model when the agent can make a mistake by providing the wrong effort level. How the contract is affected depends on (1) whether mistakes can be positive or negative or are always negative and (2) whether the cost of effort depends on intended effort or actual effort

Legal Errors and Liability Insurance

If the courts never make mistakes, so that there is no uncertainty about the negligence rule, potential injurers always meets the due care standard and are never liable. But casual empiricism and economic research provide evidence that the courts make mistakes in applying the negligence rule. We ask whether, as intuition suggests, the possibility of legal errors is a reason people buy liability insurance. We analyze the behavior of the potential injurer, the potential victim and the insurer. We show that, in equilibrium, potential victims sue with positive probability and potential injurers buy insurance, but purchase less than full coverage

Liability Insurance as Protection Against Legal Error

If the legal system operates perfectly in applying the negligence rule, potential injurers always meet the standard of care and are never liable. But substantial evidence suggests that courts make mistakes in applying the negligence rule. We analyze the behavior of the potential injurer, the potential victim and the insurer in the presence of legal errors. We show that, as intuition suggests, the risk of legal errors is sufficient to create a demand for liability insurance. In equilibrium, potential victims sue with positive probability and potential injurers buy insurance,but purchase less than full coverage