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The Equivalence of Strict Liability and Negligence Rule: A "Trompe l'oeil" Perspective

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  • Gérard Mondello

Abstract

This paper analyzes the difficulties of comparing the respective effectiveness of two among the most important liability regimes in tort law: rule of negligence and strict liability. Starting from the standard Shavellian unilateral accident scheme, I show that matching up liability regime on their capacity to provide the highest level of safety is ineffective. This demonstration lies on two components. The first one gathers some results drawn from literature that introduces uncertainty. The second one takes into consideration the beliefs of agents and their aversion to ambiguity. The model applies uncertainty to the level of maximum damage. This demonstration reinforces the previous result. Hence, both regime applies on specific tort question and comparing their individual efficiency needs to call for other components as the transaction costs associated to the burden of evidence, the fairness between victims and injurers, etc.

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File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2012-03.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by GREDEG CNRS, University of Nice-Sophia Antipolis in its series GREDEG Working Papers with number 2012-03.

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Length: 31 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:gre:wpaper:2012-03

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Related research

Keywords: Strict liability; Negligence rule; Ambiguity theory; Uncertainty; Accident Model;

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  1. Dominique Demougin & Claude Fluet, 1998. "A Further Justification for the Negligence Rule," Cahiers de recherche du Département des sciences économiques, UQAM 9801, Université du Québec à Montréal, Département des sciences économiques.
  2. T. Randolph Beard, 1990. "Bankruptcy and Care Choice," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 626-634, Winter.
  3. Schmitz, Patrick W., 2000. "On the Joint Use of Liability and Safety Regulation," MPRA Paper 12536, University Library of Munich, Germany.
  4. Segerson, Kathleen & Tietenberg, Tom, 1992. "The structure of penalties in environmental enforcement: An economic analysis," Journal of Environmental Economics and Management, Elsevier, vol. 23(2), pages 179-200, September.
  5. Demougin, Dominique & Fluet, Claude, 2001. "Monitoring versus incentives," European Economic Review, Elsevier, vol. 45(9), pages 1741-1764, October.
  6. Louis Kaplow & Steven Shavell, 1999. "Economic Analysis of Law," NBER Working Papers 6960, National Bureau of Economic Research, Inc.
  7. Chateauneuf, Alain & Eichberger, Jürgen & Grant, Simon, 2003. "Choice under Uncertainty with the Best and Worst in Mind: Neo-additive Capacities," Sonderforschungsbereich 504 Publications 03-10, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
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