Switching Consumers and Product Liability: On the Optimality of Incomplete Strict Liability

Switching consumers and product liability: on the optimality of incomplete strict liability

This paper shows that it may be socially optimal to grant accident victims less than full compensation. In our framework, firms are liable under product liability but also invest in care to prevent consumers switching to competitors. Affecting the partition of consumers by means of care-taking is not desirable from a social standpoint. Consequently, it may be optimal to reduce liability below f...

A Note on the Optimality of Strict Liability

I show below that, contrary to what is widely accepted, in situations of unilateral care a rule of strict liability is not optimal. The difference between my results and previous ones follows from my consideration of the victim’s rational behavior. JEL number: K13 (Tort Law and Product Liability). * I would like to thank Dan Orr and Tom Ulen for helpful comments on earlier drafts. Of course, re...

Strict versus Negligence Software Product Liability

The law of products liability in tort is designed to maintain a reasonable balance between the inevitable social costs and the benefits of innovative product technologies. Technological development must be supported not only for the best interests of the public but also the side effect namely product defect into one of the following: (1) manufacturing defect; failures to correctly implement saf...

The Case Against Strict Liability

Product liability.

Product liability litigation has made important contributions to tobacco control, especially by uncovering incriminating industry documents and publicizing product dangers and industry misconduct. WHO Framework Convention on Tobacco Control (FCTC) Article 19 encourages Parties to strengthen legal procedures to facilitate these lawsuits and to establish mechanisms for mutual assistance. Creative...