This paper compares the impacts of a penalty on accident and a per-unit tax on output, when social damages depend on the output of firms. The choice of the optimal regulation, aiming at internalizing a damage, is influenced both by the market power of firms and by their potential (in)solvency in...

The US food industry faces tobacco-style lawsuits for providing misleading information about health risks linked to the consumption of fatty products. This paper investigates the link between alternative liability rules and the incentive for disclosing health information to consumers. We show...