Risky Activities and Strict Liability Rules: Delegating Safety

The Effect of Liability-Sharing Rules in Delegating Hazardous Activities

This paper examines the effects of liability-sharing rules on social welfare and risk reduction when one firm (the principal) delegates indivisible hazardous activities to one of the potential firms (the agents). The problem is posed as providing incentives from the principal to the agents, through the contract, to reduce the level of accident probability under a liability rule in force. Our ma...

strict liability; foundations and instances

strict liability is the result of philosophical ideas of lawyers in front of developments in human knowledge and complexity of social relationships. strict liability the main aim is facilitation of victim's compensation, so the proof of fault is not necessary and causation is sufficient. this type of liability is justified by various foundations of economics, society and morality. in the b...

The Case Against Strict Liability

Digitized by the Internet Archive in 2011 with Funding from Product Safety, Liability Rules and Retailer Bankruptcy] Product Safety, Liability Rules and Retailer Bankruptcy Received Product Safety, Liability Rules and Retailer Bankrupcty

In this paper, we examine the levels of care which would be chosen by a monopolistic manufacturer and competitive retailer, when both the manufacturer and retailer can affect the probability of an accident and when the manufacturer cannot observe ex ante the care chosen by the retailer. We show that if retailer bankruptcy is not possible, retailer liability is superior to manufacturer liability...

Pollution Externalities: Social Cost and Strict Liability

This paper critically considers the neoclassical social-cost approach to problems of pollution. This traditional approach, when subjected to close scrutiny, is found to be seriously wanting in applicability and consistency. A less ambitious alternative based on notions of strict liability is offered. The social-cost approach is an offshoot of the “new welfare economics~’developed during the las...