Using a structural model of the interactions between governments, firms and insurance companies, we characterise the distortions in environmental liability sharing between firms and insurance companies that the imperfect implementation of government policies implies. These distortions stem from three factors: the presence of moral hazard, the non congruence between firms/insurers objectives and social welfare, and the courts’ imperfect assessment of safety care levels exerted by firms. We characterize cases where the efficient liability sharing factor is above or below its full information perfect implementation level. We derive comparative statics results indicating how sensitive the liability sharing factor is to changes in parameters (parameters that underlie the firm profit level and volatility, the cost of safety care, the monitoring cost, the social cost of public funds, the effectiveness of care in reducing the probability of accident) that are relevant for the characterization of optimal policies (liability sharing, safety care standards) toward environmental protection or the prevention of industrial accidents. We derive policy implications regarding environmental disaster insurance policies.
À l’aide d’un modèle structurel des interactions entre les gouvernements, les entreprises et les assureurs, nous caractérisons les distorsions dans le partage des responsabilités entre entreprises et assureurs qu’implique la mise en place imparfaite des politiques gouvernementales. Ces distorsions résultent de trois facteurs : la présence de risque moral, la non-congruence des objectifs des entreprises, des assureurs et de bien-être social, et l’observation imparfaite des efforts de prévention des entreprises par le système judiciaire. Nous dérivons des résultats de statique comparée montrant la sensibilité du facteur de partage des responsabilités à des changements dans les paramètres sous-jacents à la profitabilité, au coût des efforts de prévention, à l’efficacité de ces efforts dans la réduction de la probabilité d’accident, au coût de monitoring, au coût social des fonds publics, et qui sont pertinents à la caractérisation des politiques optimales (partage de responsabilité, standard légal du niveau de prévention) de protection environnementale et de prévention des accidents. Nous en déduisons certaines implications quant aux politiques relatives à l’assurance contre les désastres environnementaux.
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Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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