Tort law under oligopolistic competition

Gerard Mondello and Evens Salies

SciencePo Working papers Main from HAL

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. Furthermore, 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 than maintaining a high level of safety.

Keywords: Cournot competition; Permit system; Strict liability; Current regime; Industry (search for similar items in EconPapers)
Date: 2016-09-01
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03459225
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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)
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