In this paper I want to demonstrate that it is not possible, with traditional liability rules, to have one party that takes an efficient level of precaution. Both parties, whaever is the rule, take an excessive level of precaution. The problem is that, when we try to calculate the costs of an...

A widely accepted view says that Folk Theorem holds in the repeated Cournot oligopoly games with imperfect price signals satisfying generic conditions. We show that this view is not justi- fied. We argue that maintaining asymptotic joint monopoly outcome is not possible with noisy price signals....