Title : Multiple tortfeasors in high risk industries: how to share liability?
Author(s) : Julien Jacob, Bruno Lovat
Abstract : We develop a model in which two firms contribute to a risk of accident, each firm being financially unable to compensate for the entire damage. One firm directly operates the risky activity (and can make an effort in care to reduce the probability of an accident occurring), while the other firm provides an input technology whose quality has an impact on the likelihood an of accident occurring. We define a second-best rule of apportionment of liability between these two firms, and we show that this optimal sharing rule is sensitive to the market relationship on the technological market; thus calling for a collaboration between agencies in charge of risk regulation and those in charge of competition issues.
Key-words : multiple tortfeasors, sharing liability, insolvency, innovation, technical diffusion, market power.
JEL Classification : K13, H23