Christian Ewerhart and Patrick W. Schmitz
American Economic Review, Vol. 88 (4), 1998, 1027.
Abstract. Kolstad, Ulen and Johnson (1990) have conjectured that exclusive use of negligence liability leads to suboptimal choice of precaution in the presence of uncertainty and that ex ante regulation can correct these inefficiencies. We complete their argument by making a mild additional premise.
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