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Identifier to cite or link to this item: https://hdl.handle.net/10086/25594

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Title
Nuclear Accident, Liability Rules and a Regulated Monopoly
Creator
Creator Name
Aoki, Reiko Aoki, Reiko
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Hamada, Koichi Hamada, Koichi
Affiliation
Affiliation Name
Yale Universisty
Editor
Contributor Name
一橋大学経済研究所世代間問題研究機構 = Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University
Abstract
We study the role of liability rules in the case of nuclear accidents by the Tokyo Electric Power Company (TEPCO), such as the accident after the East Kanto Earthquake in Japan. We re-examine the claim that the absolute or unlimited liability is the best under actual situations. For example, TEPCO is a vertically integrated monopoly power company in the Kanto region. We show that monopolist may produce more than socially optimal level of output and spend too little to prevent an accident with limited liability if cost of accident avoidance is variable cost. When there is under production by the monopoly, then increasing liability will aggravate monopoly distortion and reduce welfare. We show that welfare increases with size of liability when cost of accident avoidance is fixed cost. We also consider possibility of regulatory capture by TEPCO and implications.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2013-03
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
CIS Discussion paper series ; No. 600
Relation
Related Identifier
URI
  http://cis.ier.hit-u.ac.jp/English/index.html
Number of Pages
21
Appears in Collections
CIS Discussion paper series
URL
https://hdl.handle.net/10086/25594