A further justification for the negligence rule
AbstractWe use a principal-agent framework to reexamine the implications of the negligence and strict liability rules when the tort-feasor is an agency. We assume a unilateral care situation and consider both the cases of moral hazard and of adverse selection. In both instances the negligence rule is shown to Pareto dominate the strict liability rule when the activity level is exogenously given. We find a simple condition which guarantees that the result extends to an endogenous activity level. We also examine the case where this condition is not satisfied.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal International Review of Law and Economics.
Volume (Year): 19 (1999)
Issue (Month): 1 (March)
Contact details of provider:
Web page: http://www.elsevier.com/locate/irle
Other versions of this item:
- Dominique Demougin & Claude Fluet, 1998. "A Further Justification for the Negligence Rule," Cahiers de recherche du DÃ©partement des sciences Ã©conomiques, UQAM 9801, Université du Québec à Montréal, Département des sciences économiques.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Schweizer, Urs, 2011. "Vicarious Liability and the Intensity Principle," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 364, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Feess, E. & Hege, U., 2000.
"Safety Monitoring, Capital Structure, and "Financial Responsibility","
2000-33, Tilburg University, Center for Economic Research.
- Feess, Eberhard & Hege, Ulrich, 2003. "Safety monitoring, capital structure, and "financial responsibility"," International Review of Law and Economics, Elsevier, vol. 23(3), pages 323-339, September.
- Bisso, Juan Carlos & Choi, Albert H., 2008. "Optimal agency contracts: The effect of vicarious liability and judicial error," International Review of Law and Economics, Elsevier, vol. 28(3), pages 166-174, September.
- Henry van Egteren & R. Smith & Dean McAfee, 2004. "Harmonization of Environmental Regulations When Firms are Judgment Proof," European Journal of Law and Economics, Springer, vol. 17(2), pages 139-164, March.
- Gérard Mondello, 2012.
"The Equivalence of Strict Liability and Negligence Rule: A " Trompe l'œil " Perspective,"
- Gérard Mondello, 2012. "The Equivalence of Strict Liability and Negligence Rule: A « Trompe l'œil » Perspective," Working Papers 2012.08, Fondazione Eni Enrico Mattei.
- Gérard Mondello, 2012. "The Equivalence of Strict Liability and Negligence Rule: A "Trompe l'oeil" Perspective," GREDEG Working Papers 2012-03, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
- Joshua Graff Zivin & Richard Just & David Zilberman, 2003.
"Risk Aversion, Liability Rules, and Safety,"
NBER Working Papers
9678, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.