Ambiguous Beliefs on Damages and Civil Liability Theories

43 Pages Posted: 27 Sep 2013 Last revised: 1 Oct 2013

See all articles by Gérard Mondello

Gérard Mondello

Université de Nice Sophia Antipolis; University of Angers - French National Center for Scientific Research (CNRS)

Date Written: September 27, 2013

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

JEL Classification: K0, K32,Q01, Q58

Suggested Citation

Mondello, Gérard, Ambiguous Beliefs on Damages and Civil Liability Theories (September 27, 2013). FEEM Working Paper No. 75.2013. Available at SSRN: https://ssrn.com/abstract=2331952 or http://dx.doi.org/10.2139/ssrn.2331952

Gérard Mondello (Contact Author)

Université de Nice Sophia Antipolis ( email )

250, rue Albert Einstein
B.P. 70
Sophia Antipolis, 06560
France

University of Angers - French National Center for Scientific Research (CNRS) ( email )

250 avenue Albert Einstein
Valbonne Sophia Antipolis, 06560
France
33493954327 (Phone)

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