On Liability and Insurance
AbstractThe question considered in this article is how liability rules and insurance affect incentives to reduce accident risks and the allocation of such risks. This question is examined when liability is strict or based on the negligence rule; and, if first-party and liability insurance are available, when insurers have information about insured parties' behavior and when they do not have such information. The conclusions are in essence that although both of the forms of liability create incentives to take care, they differ in respect to the allocation of risk; that, of course, the presence of insurance markets mitigates this difference and alters incentives to take care; and that despite the latter effect, the sale of insurance is socially desirable.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 13 (1982)
Issue (Month): 1 (Spring)
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Web page: http://www.rje.org
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- 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, Économie, Gestion (GREDEG CNRS), University of Nice-Sophia Antipolis.
- Gérard Mondello, 2012. "The Equivalence of Strict Liability and Negligence Rule: A " Trompe l'œil " Perspective," Post-Print hal-00727223, HAL.
- Gérard Mondello, 2012. "The Equivalence of Strict Liability and Negligence Rule: A « Trompe l'œil » Perspective," Working Papers 2012.08, Fondazione Eni Enrico Mattei.
- Alma Cohen & Rajeev Dehejia, 2003.
"The Effect of Automobile Insurance and Accident Liability Laws in Traffic Fatalities,"
NBER Working Papers
9602, National Bureau of Economic Research, Inc.
- Cohen, Alma & Dehejia, Rajeev, 2004. "The Effect of Automobile Insurance and Accident Liability Laws on Traffic Fatalities," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 357-93, October.
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