IDEAS home Printed from https://ideas.repec.org/a/bpj/germec/v3y2002i1p43-51.html
   My bibliography  Save this article

Accident Law: Efficiency May Require an Inefficient Standard

Author

Listed:
  • Goerke Laszlo

    (University of Konstanz, Konstanz, Germany)

Abstract

In a world with risk-neutral agents in which accidents occur with a positive probability, liability rules will only induce efficient behaviour if these rules impose the full (marginal) costs of an action on the parties. However, institutional restrictions or bilateral activity choices can prevent the full internalization of costs. A mechanism is proposed which guarantees an efficient outcome: monetary fines which are not related to the occurrence of an accident. Such a mechanism requires individuals to violate the standard of care in order to trigger the fine payments. Hence, efficiency requires an excessive standard.

Suggested Citation

  • Goerke Laszlo, 2002. "Accident Law: Efficiency May Require an Inefficient Standard," German Economic Review, De Gruyter, vol. 3(1), pages 43-51, February.
    • Handle: RePEc:bpj:germec:v:3:y:2002:i:1:p:43-51
    DOI: 10.1111/1468-0475.00051
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-0475.00051
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1111/1468-0475.00051?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
    2. Tullock, Gordon, 1981. "Negligence again," International Review of Law and Economics, Elsevier, vol. 1(1), pages 51-62, June.
    3. Hindley, Brian & Bishop, Bill, 1983. "Accident liability rules and externality," International Review of Law and Economics, Elsevier, vol. 3(1), pages 59-68, June.
    4. Jörg Finsinger & Mark V. Pauly, 1990. "The Double Liability Rule*," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 15(2), pages 159-169, September.
    5. Jerry Green, 1976. "On the Optimal Structure of Liability Laws," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 553-574, Autumn.
    6. Shavell, Steven, 1993. "The Optimal Structure of Law Enforcement," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 255-287, April.
    7. Arlen, Jennifer H., 1990. "Re-examining liability rules when injurers as well as victims suffer losses," International Review of Law and Economics, Elsevier, vol. 10(3), pages 233-239, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ram Singh, 2006. "On the Existence and Efficiency of Equilibria under Liability Rules," Working papers 150, Centre for Development Economics, Delhi School of Economics.
    2. Allan M Feldman & Ram Singh, 2021. "Equilibria under Liability Rules: How the standard claims fall apart," Working papers 315, Centre for Development Economics, Delhi School of Economics.
    3. Feldman Allan & Singh Ram, 2021. "Equilibria Under Negligence Liability: How the Standard Claims Fall Apart," Review of Law & Economics, De Gruyter, vol. 17(1), pages 1-33, March.
    4. Laszlo Goerke, 2003. "Road Traffic and Efficient Fines," European Journal of Law and Economics, Springer, vol. 15(1), pages 65-84, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laszlo Goerke, 2001. "Accident Law: An Excessive Standard May Be Efficient," CESifo Working Paper Series 625, CESifo.
    2. Bowles, Roger & Faure, Michael & Garoupa, Nuno, 2000. "Economic analysis of the removal of illegal gains," International Review of Law and Economics, Elsevier, vol. 20(4), pages 537-549, December.
    3. Giovanni Immordino & Marco Pagano, 2010. "Legal Standards, Enforcement, and Corruption," Journal of the European Economic Association, MIT Press, vol. 8(5), pages 1104-1132, September.
    4. Suurmond, Guido, 2007. "The effects of the enforcement strategy," MPRA Paper 21142, University Library of Munich, Germany.
    5. Lampach, Nicolas & Wijtvliet, Wessel & Dyevre, Arthur, 2020. "Merchant hubs and spatial disparities in the private enforcement of international trade regimes," International Review of Law and Economics, Elsevier, vol. 64(C).
    6. Christian Growitsch & Nicole Nulsch & Margarethe Rammerstorfer, 2012. "Preventing innovative cooperations: the legal exemptions unintended side effect," European Journal of Law and Economics, Springer, vol. 33(1), pages 1-22, February.
    7. Germani, Anna Rita & Morone, Andrea & Morone, Piergiuseppe, 2009. "Investigating Discretionary Environmental Enforcement: a pilot experiment," MPRA Paper 12735, University Library of Munich, Germany.
    8. Thierry Kirat & Frédéric Marty, 2006. "La mise en œuvre de la réglementation : une lecture économico-juridique du secteur électrique et des marchés publics," Economie & Prévision, La Documentation Française, vol. 0(4), pages 101-116.
    9. Mohamed Jellal & Nuno Garoupa, 1999. "Optimal law enforcement under asymmetric information," Economics Working Papers 401, Department of Economics and Business, Universitat Pompeu Fabra.
    10. Hüschelrath, Kai & Peyer, Sebastian, 2013. "Public and private enforcement of competition law: A differentiated approach," ZEW Discussion Papers 13-029, ZEW - Leibniz Centre for European Economic Research.
    11. Bonaventura, Luigi & Orlando, Danilo, 2007. "Enforcement of Regulation, Irregular Sector, and Firm Performance," MPRA Paper 14686, University Library of Munich, Germany.
    12. Ram Singh, 2006. "On the Existence and Efficiency of Equilibria under Liability Rules," Working papers 150, Centre for Development Economics, Delhi School of Economics.
    13. Germani, Anna Rita & Morone, Andrea & Morone, Piergiuseppe & Scaramozzino, Pasquale, 2013. "Discretionary enforcement and strategic interactions between firms, regulatory agency and justice department: a theoretical and empirical investigation," MPRA Paper 51369, University Library of Munich, Germany.
    14. Anna Rita Germani, 2007. "The Environmental Enforcement in the Civil and the Common Law Systems. A Case on the Economic Effects of Legal Institutions," Quaderni DSEMS 22-2007, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    15. Feess, Eberhard & Sarel, Roee, 2022. "Optimal fine reductions for self-reporting: The impact of loss aversion," International Review of Law and Economics, Elsevier, vol. 70(C).
    16. Nuno Garoupa & Mohamed Jellal, 2002. "A Note on Optimal Law Enforcement under Asymmetric Information," European Journal of Law and Economics, Springer, vol. 14(1), pages 5-13, July.
    17. Anna Rita Germani & Pasquale Scaramozzino & Andrea Morone & Piergiuseppe Morone, 2017. "Discretionary enforcement and strategic interactions between enforcement agencies and firms: a theoretical and laboratory investigation," Journal of Regulatory Economics, Springer, vol. 52(3), pages 255-284, December.
    18. Garoupa, Nuno, 2001. "Optimal magnitude and probability of fines," European Economic Review, Elsevier, vol. 45(9), pages 1765-1771, October.
    19. Innes, Robert, 2004. "Enforcement costs, optimal sanctions, and the choice between ex-post liability and ex-ante regulation," International Review of Law and Economics, Elsevier, vol. 24(1), pages 29-48, March.
    20. Steven Shavell, 2005. "Liability for Accidents," NBER Working Papers 11781, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:germec:v:3:y:2002:i:1:p:43-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.