Civil liability, Knight's UnCertainty and non-diCtatorial regUlator Documents de travail GREDEG GREDEG Working Papers Series
Résumé
Abstract: This paper reviews the foundations of the unilateral standard accident model under
Knightian uncertainty. It extends the Teitelbaum (2007)’s seminal article (who introduces
radical uncertainty) by expanding it from producers to victims and from the probability
distribution of accidents to the scale of damage. Mainly, it also considers a regulator who
aggregates the agents’ preferences (Neghisi (1960) type). Under the condition that the
troublemakers’ resources are sufficient to cover the damage, the article shows that
uncertainty does not preclude, first, the determination of a socially optimal level of care, and
second, whatever the civil liability regime (strict liability or negligence) it shows that they
determine the same level of socially first-best care. The solution is inefficient only when the
polluter’s wealth is insufficient to repair the victim’s losses.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)