On the joint use of licensing and liability
Licensing is a widely used technique applied to impose regulations. Firms inducing harm must hold a license issued by a regulatory agency on a case-by-case basis. A firm may also be subject to liability. This paper studies the implications on social welfare of combining licensing with strict liability. Contributions include the study of a joint use and related administrative costs. The latter include costs pertaining to litigation and the issuing and enforcing of licenses. It is established when a joint use is motivated. Regulatory compliance should protect from liability in order to decrease litigation and enforcement costs and associated distortions.
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References listed on IDEAS
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- Viscusi, W Kip, 1988. "Product Liability and Regulation: Establishing the Appropriate Institutional Division of Labor," American Economic Review, American Economic Association, vol. 78(2), pages 300-304, May.
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- Hiriart, Yolande & Martimort, David & Pouyet, Jérôme, 2004. "On the Optimal Use of Ex Ante Regulation and Ex Post Liability," IDEI Working Papers 274, Institut d'Économie Industrielle (IDEI), Toulouse.
- Innes, Robert, 2004. "Enforcement costs, optimal sanctions, and the choice between ex-post liability and ex-ante regulation," International Review of Law and Economics, Elsevier, vol. 24(1), pages 29-48, March.
- Erik Lenntorp, 2008. "Hell or High Water? An Economic Analysis of the Swedish Institutions for Flood Risk Management," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 33(2), pages 323-336, April.
- Decker, Christopher S, 2003. "Corporate Environmentalism and Environmental Statutory Permitting," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 103-129, April.
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- Calcott, Paul & Hutton, Stephen, 2006. "The choice of a liability regime when there is a regulatory gatekeeper," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 153-164, March.
- Rose-Ackerman, Susan, 1991. "Regulation and the Law of Torts," American Economic Review, American Economic Association, vol. 81(2), pages 54-58, May. Full references (including those not matched with items on IDEAS)
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