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Modelling the choice between regulation and liability in terms of social welfare Author info | Abstract | Publisher info | Download info | Related research | Statistics Marcel Boyer
Donatella Porrini
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Using a formal political economy model with asymmetric information, we illustrate the conditions under which an environmental protection system based on extending liability to private financiers is welfare superior, inferior, or equivalent to a system based on an incentive regulatory scheme subject to capture by the regulatees. We explicitly consider the following factors: the cost of care and its efficiency in reducing the probability of an environmental accident, the social cost of public funds, the net profitability of the risky activities, the level of damages, and the regulatory capture bias. We characterize in such a parameter space the regions where one system dominates the other
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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics .
Volume (Year): 37 (2004)
Issue (Month): 3 (August)
Pages: 590-612
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Handle: RePEc:cje:issued:v:37:y:2004:i:3:p:590-612Contact details of provider: Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4 Email: Web page: http://economics.ca/cje/ More information through EDIRC
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Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
Boyd, James & Ingberman, Daniel E, 1997.
"The Search for Deep Pockets: Is "Extended Liability" Expensive Liability? ,"
Journal of Law, Economics and Organization ,
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Marcel Boyer & Jean-Jacques Laffont, 1995.
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CIRANO Working Papers
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[Downloadable!]
Other versions: Tracy R. Lewis, 1996.
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RAND Journal of Economics ,
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[Downloadable!] (restricted)
Tracy R. Lewis & David E. M. Sappington, 2001.
"How Liable Should a Lender Be? The Case of Judgment-Proof Firms and Environmental Risk: Comment ,"
American Economic Review ,
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[Downloadable!] (restricted)
Menell, Peter S, 1991.
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[Downloadable!] (restricted)
Steven Shavell, 1983.
"Liability for Harm Versus Regulation of Safety ,"
NBER Working Papers
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[Downloadable!] (restricted)
Marcel Boyer & Donatella Porrini, 2000.
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CIRANO Working Papers
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[Downloadable!]
Steven Shavell, 1984.
"A Model of the Optimal Use of Liability and Safety Regulation ,"
RAND Journal of Economics ,
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Shavell, S., 1986.
"The judgment proof problem ,"
International Review of Law and Economics ,
Elsevier, vol. 6(1), pages 45-58, June.
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Schmitz, Patrick W., 2000.
"On the Joint Use of Liability and Safety Regulation ,"
MPRA Paper
12536, University Library of Munich, Germany.
[Downloadable!]
Other versions: Kolstad, Charles D & Ulen, Thomas S & Johnson, Gary V, 1990.
"Ex Post Liability for Harm vs. Ex Ante Safety Regulation: Substitutes or Complements? ,"
American Economic Review ,
American Economic Association, vol. 80(4), pages 888-901, September.
[Downloadable!] (restricted)
Hahn, Robert W, 1990.
" The Political Economy of Environmental Regulation: Towards a Unifying Framework ,"
Public Choice ,
Springer, vol. 65(1), pages 21-47, April.
Marcel Boyer & Tracy R. Lewis & Wei Lin Liu, 2000.
"Setting standards for credible compliance and law enforcement ,"
Canadian Journal of Economics ,
Canadian Economics Association, vol. 33(2), pages 319-340, May.
[Downloadable!] (restricted)
Other versions: Lewis, Tracy R. & Sappington, David E. M., 1999.
"Using decoupling and deep pockets to mitigate judgment-proof problems1 ,"
International Review of Law and Economics ,
Elsevier, vol. 19(2), pages 275-293, June.
[Downloadable!] (restricted)
Marcel Boyer & Jean-Jacques Laffont, 1994.
"Environmental Risks and Bank Liability ,"
CIRANO Working Papers
94s-22, CIRANO.
[Downloadable!]
Other versions:
Boyer, M. & Laffont, J.J., 1995.
"Environmental Risks and Bank Liability ,"
Cahiers de recherche
9501, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
Boyer, M. & Laffont, J.J., 1995.
"Environmental Risks and Bank Liability ,"
Cahiers de recherche
9501, Universite de Montreal, Departement de sciences economiques.
[Downloadable!] Boyer, Marcel & Laffont, Jean-Jacques, 1994.
"Environmental Risks and Bank Liability ,"
IDEI Working Papers
45, Institut d'Économie Industrielle (IDEI), Toulouse.
Boyer, Marcel & Laffont, Jean-Jacques, 1997.
"Environmental risks and bank liability ,"
European Economic Review ,
Elsevier, vol. 41(8), pages 1427-1459, August.
[Downloadable!] (restricted) Pfaff, Alexander S P & Sanchirico, Chris William, 2000.
"Environmental Self-Auditing: Setting the Proper Incentives for Discovery and Correction of Environmental Harm ,"
Journal of Law, Economics and Organization ,
Oxford University Press, vol. 16(1), pages 189-208, April.
Tiller, Emerson H & Spiller, Pablo T, 1999.
"Strategic Instruments: Legal Structure and Political Games in Administrative Law ,"
Journal of Law, Economics and Organization ,
Oxford University Press, vol. 15(2), pages 349-77, July.
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2007.
"Agrifood safety standards, market power and consumer misperceptions ,"
105th Seminar, March 8-10, 2007, Bologna, Italy
7849, European Association of Agricultural Economists.
[Downloadable!]
Yolande Hiriart & David Martimort & Jérôme Pouyet, 2009.
"The public management of risk: Separating ex ante and ex post monitors ,"
PSE Working Papers
2009-20, PSE (Ecole normale supérieure).
[Downloadable!]
HIRIART Yolande & MARTIMORT David, 2006.
"The Benefits of Extended Liability ,"
Working Papers
06.28.221, LERNA, University of Toulouse.
[Downloadable!]
Yolande Hiriart & David Martimort & Jérôme Pouyet, 2005.
"The Regulator and the Judge: The Optimal Mix in TheControl of Environmental Risk ,"
Working Papers
hal-00243027_v1, HAL.
[Downloadable!]
Other versions: Eberhard Feess & Gerd Muehlheusser & Ansgar Wohlschlegel, 2009.
"Environmental liability under uncertain causation ,"
European Journal of Law and Economics ,
Springer, vol. 28(2), pages 133-148, October.
[Downloadable!] (restricted)
Marcel Boyer & Donatella Porrini, 2008.
"The Efficient Liability Sharing Factor For Environmental Disasters: Lessons For Optimal Insurance Regulation ,"
CIRANO Working Papers
2008s-03, CIRANO.
[Downloadable!]
Andrew F. Daughety & Jennifer F. Reinganum, 2003.
"Markets, Torts and Social Inefficiency ,"
Working Papers
0308, Department of Economics, Vanderbilt University.
[Downloadable!]
Other versions: Hiriart, Yolande & Martimort, David, 2004.
"The Benefits of Extended Liability ,"
IDEI Working Papers
334, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jun 2005.
[Downloadable!]
Juan José Ganuza & Fernando Gómez, 2003.
"Optimal Negligence Rule under Limited Liability ,"
Economics Working Papers
759, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2004.
[Downloadable!]
Gerrit de Geest & Giuseppe Dari-Mattiacci, 2005.
"Soft Regulators, Though Judges ,"
Working Papers
05-06, Utrecht School of Economics.
[Downloadable!]
Marcel Boyer & Donatella Porrini, 2007.
"Sharing Liability Between Banks and Firms: The Case of Industrial Safety Risk ,"
CIRANO Working Papers
2007s-04, CIRANO.
[Downloadable!]
Hiriart, Yolande & Martimort, David & Pouyet, Jérôme, 2005.
"The Public Management of Environmental Risk: Separating Ex Ante and Ex Post Monitors ,"
CEPR Discussion Papers
4992, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Pouliot, Sebastien & Sumner, Daniel A., 2006.
"Traceability, Liability and Incentives for Food Safety and Quality ,"
2006 Annual meeting, July 23-26, Long Beach, CA
21121, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
[Downloadable!]
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