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Deterrence by Insurance

Roy Baharad

Journal of Legal Studies2025https://doi.org/10.1086/732600article
AJG 3
Weight
0.37

What the paper says

Against the theory of third-party moral hazard—focusing on third parties who decline their risk-reducing effort in light of insurance—I analyze the mirror-image phenomenon of third-party deterrence: cases in which third parties engage in activities designed to counterbalance the insured’s moral hazard. I characterize the settings in which third-party deterrence replaces third-party moral hazard; address the economic foundations of this problem; and study its effects on risk transferring within the triangle of insurer, insured, and third parties. I also point to additional frameworks that may give rise to third-party deterrence, discuss possible implications for the incentives of insurers, and identify countervailing forces that may alleviate the ascribed distortion.

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https://doi.org/https://doi.org/10.1086/732600

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@article{roy2025,
  title        = {{Deterrence by Insurance}},
  author       = {Roy Baharad},
  journal      = {Journal of Legal Studies},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1086/732600},
}

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Deterrence by Insurance

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.