This paper studies an economic model of tort liability rules and considers litigation between a firm and a consumer, under the assumption that the consumer may not perfectly observe the firm’s action. We compare two alternative tort liability rules: the Negligence rule and strict liability with contributory negligence. We consider the noiseless case as a benchmark, and show that under those two...

This paper examines auditor liability rules under imperfect information, costly litigation and risk averse auditors. A negligence rule fails in such a setting, because in equilibrium auditors will deviate with positive probability from any given standard. It is shown that strict liability outperforms negligence with respect to risk allocation, and the probability that a desired level of care is...

Physicians typically carry virtually complete malpractice insurance coverage. This contradicts standard theoretical predictions that under a negligence rule of liability there should be no demand for insurance, and insurance policies under moral hazard will contain co-payment provisions. It is argued that judicial 'errors' in defining negligence generate a demand for liability and legal defense...

For many years physicians and other medical providers in the United States have been subject to a negligence rule of liability. Under a negligence rule, patients who suffer an adverse outcome are entitled to compensation if they can show that they incurred an injury that was caused by the physician's failure to take due care, defined as departure from the customary standard of care of physician...

Considering the controversies related to Brazilian General Data Protection Law (LGPD) liability regime, this paper aims examine kind of which would be more efficient as one capable maximize social welfare, pursuant and Economics Theory. After a brief study over regimes, doctrinal discussion concerning theme is presented followed by its economic analysis. We conclude that LGPD authorizes constru...