A Microeconomic Analysis toward Building Liability Lawin the Post-Earthquake Era

Takayuki Oishi () and Shin Sakaue ()
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Takayuki Oishi: Aomori public university
Shin Sakaue: Sophia University

No 890, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: First, we investigate which type of the liability law that protects nuclear power plants against catastrophe is socially optimal. We show that when a firm with a few funds is managed under the strict liability, maximization of social welfare is impossible since the firm may not cope with the damage by a catastrophic disaster. On the other hand, when the government set suitable safety standards in the case where a firm has a few, funds, maximization of social welfare is possible by using the negligence rule. second, we investigate a normative analysis of liability problems that deal with how to share joint liability among agents. We axiomatize the Shapley value

Keywords: the Great East Japan Earthquake; law and economics; catastrophic risk; liability game; the Shapley value (search for similar items in EconPapers)
JEL-codes: C71 K32 Q54 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-law
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