Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76045
Authors: 
Goerke, Laszlo
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 625
Abstract: 
In a world with risk-neutral agents, liability rules will only induce efficient behaviour if these rules impose the full (marginal) costs of an action on the parties. However, institutional restrictions or bilateral activity choices can prevent the full internalisation of costs. A mechanism is proposed which guarantees an efficient outcome: monetary fines which are not related to the occurrence of an accident. Such a mechanism requires individuals to violate the standard of care in order to trigger fine payments. Hence, efficiency needs an excessive standard.
Subjects: 
accident law
activity
care
efficiency
fines
standards of care
tort law
Document Type: 
Working Paper

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