Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/89615 
Year of Publication: 
2013
Series/Report no.: 
Nota di Lavoro No. 75.2013
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
This paper analyzes the meaning of comparing the economic performance of strict liability and negligence rule in a unilateral standard accident model under Knightian uncertainty. It focuses on the cost expectation of major harm on which the injurers form beliefs. It shows first that, when the Court agrees with the regulator, whatever the liability regime, the first best level of care is never reached but under both regimes the tortfeasors define the same level of care. Second, when, judge and regulator disagree, it is impossible to discriminate among liability standards because the issue depends on the injurer’s optimism degree.
Subjects: 
Strict Liability
Negligence Rule
Ambiguity Theory
Uncertainty
Accident Model
JEL: 
K0
K32
Q01
Q58
Document Type: 
Working Paper

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