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The unilateral accidenct model under a constrained Cournot-Nash duopoly

Author

Listed:
  • Gérard Mondello

    (Groupe de Recherche en Droit, Economie et Gestion)

  • Evens Salies

    (Observatoire français des conjonctures économiques)

Abstract

Summary: This paper extends the basic unilateral accident model to allow for Cournot competition. Two firms compete with production input and prevention as strategic variables under asymmetric capacity constraints. We find that liability regimes exert a crucial influence on the equilibrium price and outputs. Strict liability leads to higher output and higher risk compared to negligence. We also study the conditions under which both regimes converge. Key Words: Tort Law, Strict

Suggested Citation

  • Gérard Mondello & Evens Salies, 2018. "The unilateral accidenct model under a constrained Cournot-Nash duopoly," Sciences Po publications 14, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/5a1unjmoh881mrfbrlqhebkbba
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    References listed on IDEAS

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    1. Florian Baumann & Klaus Heine, 2013. "Innovation, Tort Law, and Competition," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(4), pages 703-719, December.
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    3. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, December.
    4. Yolande Hiriart & David Martimort, 2006. "The benefits of extended liability," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 562-582, September.
    5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    6. Giuseppe Dari-Mattiacci & Gerrit De Geest, 2005. "Judgment Proofness under Four Different Precaution Technologies," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(1), pages 38-56, March.
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    More about this item

    Keywords

    Tort Law; Strict liability; Negligence Rule; Imperfect competition; Oligopoly; Cournot competition;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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