Ambiguous Beliefs on Damages and Civil Liability Theories

Gerard Mondello

No 2013.75, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper analyzes the meaning of comparing the economic performance of strict liability and negligence rule in a unilateral standard accident model under Knightian uncertainty. It focuses on the cost expectation of major harm on which the injurers form beliefs. It shows first that, when the Court agrees with the regulator, whatever the liability regime, the first best level of care is never reached but under both regimes the tortfeasors define the same level of care. Second, when, judge and regulator disagree, it is impossible to discriminate among liability standards because the issue depends on the injurer’s optimism degree.

Keywords: Strict Liability; Negligence Rule; Ambiguity Theory; Uncertainty; Accident Model (search for similar items in EconPapers)
JEL-codes: K0 K32 Q01 Q58 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-law and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Ambiguous Beliefs on Damages and Civil Liability Theories (2013)
Working Paper: Ambiguous Beliefs on Damages and Civil Liability Theories" (2013)
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