Regulation of waters to generate electricity contributes to two different, but related flood risks. A dam may break resulting in a catastrophic accident. “High flow” floods are less costly and occur when there are large amounts of rain falls in combination with filled reservoirs. Here, the...

Licensing is a widely used technique applied to impose regulations. Firms inducing harm must hold a license issued by a regulatory agency on a case-by-case basis. A firm may also be subject to liability. This paper studies the implications on social welfare of combining licensing with strict...