Strict Liability versus Negligence in a Market Setting
NBER Working Paper No. 420 (Also Reprint No. r0119)
This paper formally analyzes strict liability and negligence in a market setting. The discussion emphasizes the impact of the rules on the market price and on the number of firms in the industry. For simplicity, the damage caused by each firm is assumed to be determined only by that firm's "care" (and not also by the firm's output or the victim's behavior).
Published: Polinsky, A. Mitchell. "Strict Liability vs. Negligence in a Market Setting ." The American Economic Review, Vol. 70, No. 2, (May 1980), pp. 363-367.