Multiple tortfeasors in high risk industries: how to share liability?

Julien Jacob and Bruno Lovat

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: We develop a model in which two firms contribute to a risk of accident, each firm being financially unable to compensate for the entire damage. One firm directly operates the risky activity (and can make an effort in care to reduce the probability of an accident occurring), while the other firm provides an input technology whose quality has an impact on the likelihood an of accident occurring. We define a second-best rule of apportionment of liability between these two firms, and we show that this optimal sharing rule is sensitive to the market relationship on the technological market; thus calling for a collaboration between agencies in charge of risk regulation and those in charge of competition issues.

Keywords: multiple tortfeasors; sharing liability; insolvency; innovation; technical diffusion; market power. (search for similar items in EconPapers)
JEL-codes: H23 K13 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2016-35

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