Tort Law under Oligopolistic Competition

Gerard Mondello and Evens Salies

No 2016-29, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This article extends the unilateral accident standard model to allow for Cournot competition. Assuming risk-neutrality for the regulator and injurers, it analyzes three liability regimes: strict liability, negligence rule, and strict liability with administrative authorization or permits systems. Under competition the equivalence between negligence rule and strict liability no longer holds, and negligence insures a better level of social care. However, enforcing both a permit system and strict liability restores equivalence between liability regimes. However, whatever the current regime, competition leads to lower the global safety level of industry. Indeed, the stronger firm may benefit from safety rents, which they may use to increase production rather that maintaining a high level of safety.

Keywords: Tort Law; Strict Liability; Negligence rule; Imperfect Competition; Oligopoly; Cournot Competition (search for similar items in EconPapers)
JEL-codes: D43 K13 L13 L52 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-09
New Economics Papers: this item is included in nep-com, nep-ind and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://195.220.190.85/GREDEG-WP-2016-29.pdf First version, 2016 (application/pdf)

Related works:
Working Paper: Tort Law under Oligopolistic Competition (2021)
Working Paper: Tort law under oligopolistic competition (2016)
Working Paper: Tort law under oligopolistic competition (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2016-29

Access Statistics for this paper

More papers in GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France Contact information at EDIRC.
Bibliographic data for series maintained by Patrice Bougette ().