Products Liability

Abstract

This chapter for the Encyclopedia of Law and Economics (2d ed. forthcoming) provides a survey of the economic analysis of the law governing liability for defective products, commonly known as products liability. Sections 11.2 through 11.10 develop the economic framework for evaluating different liability rules. Sections 11.11 through 11.13 describe the impact that the products liability system has had on product safety, innovation, and the market for liability insurance. The remaining sections discuss the efficiency properties of the main doctrines in products liability.