Economics of Liability Precaution versus Avoidance
Language
EN
Article de revue
This item was published in
Revue d'Economie Politique. 2018, vol. 128, n° 1, p. 41-58
English Abstract
This paper analyses the behaviour of an agent under strict liability and negligence when he can influence both the probability of the accident and the probability of being found liable in case of accident. We aim to compare ...Read more >
This paper analyses the behaviour of an agent under strict liability and negligence when he can influence both the probability of the accident and the probability of being found liable in case of accident. We aim to compare the normative properties of strict liability versus fault-based liability under such circumstances. The model demonstrates that only a negligence rule is efficient and that the optimal damages under strict liability is less than what is usually admitted in the literature, i.e. the expected fine, given the probability to escape the liability, should be less than the level of harm. Finally, the paper highlights the role played by the technologies of precaution and evasion in the results.Read less <
English Keywords
Care Level
Disappearing Defendant
Negligence
Punishment Avoidance
Strict Liability