When a firm undertakes risky activities, the conflict between social and private incentives to implement safety care requires public intervention which can take the form of both monetary incentives and also ex ante or ex post monitoring, i.e., before or after an accident occurs. We delineate the...

A firm engaged in activities which are environmentally risky has private informationboth on her choice of safety care and on the level of her assets. Public authorities havea stake in implementing a high level of prevention effort and in unveiling the true levelof assets for liability payments....

When a firm undertakes activities which are risky for the environment, the conflict between social and private incentives to exercise safety care requires imposing fines in case a damage occurs. Introducing asymmetric information on the firm's wealth, we show that the fines and probabilities of...