accident, but only one party has the actual possibility of avoiding the accident We shall consider all such possibilities when referring to the effect of alternative legal rules on the parties' behavion 2. 1 Strict Rules: No Liability and Strict Liability Strict liability can be thought of as the mirror-image of no liability. a party who occasions harm to another will compensate the victim regardless of who is at fault. This rule is the converse of no liability. No liability can in fact be thought of as strict liability on the part of the victim, in that the victim always bears the loss regardless of the parties' fault. No liability and strict liability can thus be considered the limit points in the range of possible liability rules. The choice between strict liability and no liability has obvious distributive effects in that strict liability results in the victim al ways being compensated, while no liability makes the victim bear all accident costs The different allocation of accident costs has clear incentive effects. in a strict liability system, the injurer has to bear both the cost of precaution and the This will lead to the efficient level of precaution. On the contrary, a no-iabiz, expected accident cost and, hence, he will minimize the sum of those costs ule does not achieve an efficient result because the injurer would bear of precaution without internalizing the benefit of such precaution. Absent liability, the injurer would adopt no precaution at all, which is an inefficient result. On the other hand. if we look at the victim's incentives to take precaution, we see that the opposite is true. Strict liability creates no incentives for victim precaution, while no liability would shift the entire residual liability on the victim, inducing optimal victim care. It follows that strict liability and no liability can give incentives to take efficient precaution only to one party,5 accident, but only one party has the actual possibility of avoiding the accident. We shall consider all such possibilities when referring to the effect of alternative legal rules on the parties’ behavior. 2.1 Strict Rules: No Liability and Strict Liability Strict liability can be thought of as the mirror-image of no liability. A party who occasions harm to another will compensate the victim regardless of who is at fault. This rule is the converse of no liability. No liability can in fact be thought of as strict liability on the part of the victim, in that the victim always bears the loss regardless of the parties’ fault. No liability and strict liability can thus be considered the limit points in the range of possible liability rules. The choice between strict liability and no liability has obvious distributive effects, in that strict liability results in the victim always being compensated, while no liability makes the victim bear all accident costs. The different allocation of accident costs has clear incentive effects. In a strict liability system, the injurer has to bear both the cost of precaution and the expected accident cost and, hence, he will minimize the sum of those costs. This will lead to the efficient level of precaution. On the contrary, a no-liability rule does not achieve an efficient result because the injurer would bear the cost of precaution without internalizing the benefit of such precaution. Absent liability, the injurer would adopt no precaution at all, which is an inefficient result. On the other hand, if we look at the victim’s incentives to take precaution, we see that the opposite is true. Strict liability creates no incentives for victim precaution, while no liability would shift the entire residual liability on the victim, inducing optimal victim care. It follows that strict liability and no liability can give incentives to take efficient precaution only to one party