Taxation and liability are compared here as means of controlling harmful externalities. It is emphasized that liability … liability does not require the state to determine expected harm - it requires only that injurers pay for harm that occurs …. However, taxation enjoys an advantage over liability: incentives under liability are diluted to the degree that injurers might …

harmful externalities, its actual use has been limited, mainly to the domain of pollution. Liability, in contrast, has great … importance in controlling harmful externalities. I compare the tax and liability here in theory and suggest that the conclusions … help to explain the observed predominance of liability over taxation, except in the area of pollution. The following …

This paper investigates the performance of liability rules in two-party stochastic externality problems where … negotiations are feasible and side payments are based on the realized level of externalities. Results show that an increase in … polluter liability does not necessarily increase safety or efficiency in cases where the polluter is risk neutral. Complete …

This article studies how liability for environmentally harmful discharges affects the incentives of firms to engage in …

payoffs, or because of informational externalities. In the first case, inefficiency manifests itself in excessive non …

technologies which reduce the cost of pollution abatement. The innovating firm can patent this innovation and use a licensing fee … a pollution tax or a marketable permit. However, the returns to the innovator from innovation are not the same under the …

pollution regulation. However, these studies have made restrictive assumptions regarding individual preferences and have ignored … key links between pollution, human health, and labor productivity. Together, these assumptions imply that the benefits of … that when the benefits of reduced pollution come in the form of improved health or productivity, the benefits do affect …

to liability rules when there are few parties and bargaining is feasible, but they excessively deter efficient pollution … discharges contaminate riparian properties belonging to multiple owners, and we compare property rules, liability rules, and … extreme rules. Our model helps explain the evolution of the legal treatment of water pollution from property rules to …