ECONOMIC ANALYSIS OF LAW AND THE COMPENSATION MECHANISM FOR DAMAGES (CPM): INCENTIVES UNDER THE RULE OF SUBJECTIVE LIABILITY

This article aims to analyze the Compensation Mechanism for Damages (MRP), an investor protection instrument in the Brazilian capital market (stock market), from the perspective of Law and Economics (LE). The objective is to verify the economic incentives generated by the subjective liability rule governing the MRP and to what extent agents act under these effects; that is, the efficient level of liability. To this end, through empirical research, the criteria from jurisprudence and MRP decisions regarding the liability rule (objective or subjective) applied to intermediaries and participants in the stock exchange for illicit practices were extracted. Finally, with the support of LE, the economic incentives and social costs involved in encouraging agents to adopt mitigating measures to avoid harm to investors are identified, considering the assumption that investors may seek compensation from the MRP.