A MODEL OF THE OPTIMAL USE OF LIABILITY AND SAFETY REGULATION

@article{Shavell1984AMO,
  title={A MODEL OF THE OPTIMAL USE OF LIABILITY AND SAFETY REGULATION},
  author={Steven Shavell},
  journal={The RAND Journal of Economics},
  year={1984},
  volume={15},
  pages={271-280}
}
  • S. Shavell
  • Published 22 January 1984
  • Economics
  • The RAND Journal of Economics
A model of the occurrence of accidents is used to examine liability and safety regulation as means of controlling risks. According to the model, regulation does not result in the appropriate reduction of risk--because the regulator lacks perfect information--nor does liability result in that outcome--because the incentives it creates are diluted by the chance that parties would not be sued for harm done or would not be able to pay fully for it. Thus, neither liability nor regulation is… 
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Liability and safety regulation are examined as means of controlling risks in a theoretical model of the occurrence of accidents. According to the model, regulation does not result in appropriate
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Liability in tort and the regulation of safety are considered as means of controlling accident risks using the instrumentalist, economic method of analysis.Four general determinants of the relative
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PERFORMANCE may be monitored by either inputs or outputs. For example, a legal system may monitor and punish speeding (an input into the production of accidents) and/or monitor and punish for the
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The setting for the problem under consideration is a large economic organization or system which in some cases is best thought of as the entire economy. Within this large economic organization