It has been shown by Polinsky and Shavell that the strict liability rule is socially superior to the negligence liability rule when firms are injurers, strangers are victims, and accidents have a unilateral nature if prefect competition among firms prevails. This article considers the problem of...

How the law and the social norm interact with each other in the legalized modern society, whether the law completely replaces the pre-existing social norm or they coexist, and whether their interaction achieves an efficient system of social rules or there is innate inefficiency, have remained...