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The Unilateral Accident Model under a Constrained Cournot-Nash Duopoly

Author

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  • Gérard Mondello

    (UniCA - Université Côte d'Azur)

  • Evens Salies

Abstract

This paper extends the basic unilateral accident model to allow for Cournot competition. Two firms compete with production input and prevention as strategic variables under asymmetric capacity constraints. We find that liability regimes exert a crucial influence on the equilibrium price and outputs. Strict liability leads to higher output and higher risk compared to negligence. We also study the conditions under which both regimes converge.

Suggested Citation

  • Gérard Mondello & Evens Salies, 2021. "The Unilateral Accident Model under a Constrained Cournot-Nash Duopoly," Working Papers halshs-03502605, HAL.
    • Handle: RePEc:hal:wpaper:halshs-03502605
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03502605
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Tort Law; Strict Liability; Negligence Rule; Imperfect Competition; Oligopoly; Cournot Competition JEL Classification: D43; L13; L52; K13;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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