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Strict Liability Vs Negligence: Is Economic Efficiency A Relevant Comparison Criterion?

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  • Gérard Mondello

    (UniCA - Université Côte d'Azur)

Abstract

The efficiency criterion (the highest care level at the lowest accident cost) indisputably governs the comparison of performance between strict liability and negligence. This view stems from the standard accident model development in the 70's and the 80's that ensures under ideal conditions, the equivalence between regimes and assume their potential substitutability. We develop a more general accident model (under risk universe) with divergent views among the parties about the damage. It follows that efficiency is no longer a relevant criterion. liability regimes belong to specific fields: Ultra-hazardous activities for strict liability and the remaining areas of negligence.

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  • Gérard Mondello, 2021. "Strict Liability Vs Negligence: Is Economic Efficiency A Relevant Comparison Criterion?," Working Papers halshs-03502611, HAL.
    • Handle: RePEc:hal:wpaper:halshs-03502611
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03502611
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    References listed on IDEAS

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    1. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    2. Steven Shavell, 1982. "On Liability and Insurance," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 120-132, Spring.
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    4. Kaplow, Louis & Shavell, Steven, 1996. "Accuracy in the Assessment of Damages," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 191-210, April.
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    6. Joshua C. Teitelbaum, 2007. "A Unilateral Accident Model under Ambiguity," The Journal of Legal Studies, University of Chicago Press, vol. 36(2), pages 431-477, June.
    7. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(4), pages 643-669.
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    Cited by:

    1. Wang Shaohua, 2020. "Research of Economic Theory of Liability on Food Industry," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(3), pages 122-126, September.

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    More about this item

    Keywords

    Strict Liability; Unilateral Accident Model; Negligence Rule; Ultra-hazardous activities;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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