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A General Accident Model for Risky Activities

Author

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  • Gérard Mondello

    (Université Côte d'Azur, France
    GREDEG CNRS)

Abstract

The efficiency criterion (the highest level of care at the lowest accident cost) governs the comparison of performance between strict liability and negligence. This view stems from the initial standard accident model which under ideal conditions, ensures equivalence among liability regimes and assumes their potential substitutability. We develop a more general accident model which retains the neutral to risk assumption by assuming divergent views among the parties about the scale of the damages. Efficiency then no longer appears a sufficient relevant criterion to compare liability regimes. Consequently, each belongs to a specific field: Ultra-hazardous activities in the case of strict liability and the remaining areas of negligence. Length: 23 pages

Suggested Citation

  • Gérard Mondello, 2022. "A General Accident Model for Risky Activities," GREDEG Working Papers 2022-12, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France, revised Apr 2023.
    • Handle: RePEc:gre:wpaper:2022-12
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    References listed on IDEAS

    as
    1. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    2. Gérard Mondello, 2012. "The Equivalence of Strict Liability and Negligence Rule: A « Trompe l'œil » Perspective," Working Papers 2012.08, Fondazione Eni Enrico Mattei.
    3. Steven Shavell, 1982. "On Liability and Insurance," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 120-132, Spring.
    4. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, September.
    5. Joshua C. Teitelbaum, 2007. "A Unilateral Accident Model under Ambiguity," The Journal of Legal Studies, University of Chicago Press, vol. 36(2), pages 431-477, June.
    6. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(4), pages 643-669.
    7. L. A. Franzoni, 2016. "Optimal liability design under risk and ambiguity," Working Papers wp1048, Dipartimento Scienze Economiche, Universita' di Bologna.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Tort law; Law & Economics; Unilateral accident model; Risk; Safety; Strict liability; Negligence; Ultra-hazardous activities;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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