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dc.contributor.authorAngelova, Veraen_US
dc.contributor.authorAttanasi, Giuseppeen_US
dc.contributor.authorHiriart, Yolandeen_US
dc.date.accessioned2012-04-03en_US
dc.date.accessioned2012-04-11T09:31:07Z-
dc.date.available2012-04-11T09:31:07Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/56898-
dc.description.abstractWe compare the performance of liability rules for managing environmental disasters when third parties are harmed and cannot always be compensated. A firm can invest in safety to reduce the likelihood of accidents. The firm's investment is unobservable to authorities. Externality and asymmetric information call for public intervention to define rules aimed at increasing prevention. We determine the investment in safety under No Liability, Strict Liability and Negligence, and compare it to the first best. Additionally, we investigate how the (dis)ability of the firm to fully cover potential damages affects the firm's behavior. An experiment tests the theoretical predictions. In line with theory, Strict Liability and Negligence are equally effective; both perform better than No Liability; investment in safety is not sensitive to the ability of the firm to compensate potential victims. In contrast with theory, prevention rates absent liability are much higher and liability is much less effective than predicted.en_US
dc.language.isoengen_US
dc.publisherUniv. [u.a.] Jenaen_US
dc.relation.ispartofseriesJena economic research papers 2012,012en_US
dc.subject.jelD82en_US
dc.subject.jelK13en_US
dc.subject.jelK32en_US
dc.subject.jelQ58en_US
dc.subject.ddc330en_US
dc.subject.keywordrisk regulationen_US
dc.subject.keywordliability rulesen_US
dc.subject.keywordincentives insolvencyen_US
dc.subject.keywordexperimenten_US
dc.titleRelative performance of liability rules: Experimental evidenceen_US
dc.typeWorking Paperen_US
dc.identifier.ppn689623887en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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