Latest / Deep End Era. Engineering with Sankalp
Have Limited Liability Laws Done More Harm Than Good? Risk Shifting, Tort Externalities, Banking History and Environmental Liabilities
Every time you buy a share of stock for a hundred dollars, the law guarantees that the worst thing that can ever happen to you is losing that hundred dollars—even if the company causes a ten-billion-dollar oil spill, toxic chemical leak, or banking panic. Without that shield of limited liability, modern liquid stock markets could not function; with it, shareholders hold a one-sided call option that rewards shifting catastrophic tail risks onto involuntary tort victims and taxpayers. We build the law and economics of limited liability from first principles: Adam Smith vs. the 1855 British…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.