Article ID Journal Published Year Pages File Type
5062534 Economics Letters 2006 5 Pages PDF
Abstract

It is usually taken for granted that strict liability is superior to negligence for unilateral accidents. We show that the contrary holds if some potential injurers and the court have inferior information about expected accident costs, as negligence standards may serve as an information transmission device.

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Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Liability and information transmission: The advantage of negligence based rules
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