RESEARCH HANDBOOK ON THE ECONOMICS OF TORTS, Jennifer H. Arlen, ed., Edward Elgar Ltd., Forthcoming
49 Pages Posted: 12 May 2011 Last revised: 4 Jun 2011
Date Written: May 11, 2011
This chapter provides a survey of much of the recent theoretical analysis of products liability. We start by describing an idealized model and providing the specific economic assumptions which underpin it. Later sections examine the effects of relaxing these assumptions, which has been the focus of much of the theoretical work over the last few decades. These modifications include: informational differences between producers and consumers that arise over the life of a product; incorporation of endogenously-determined costs, such as those that arise from investment in care; and evaluating contractual versus mandatory liability.
Keywords: Products Liability, Safety, Contractual Liability, Strict Liability
JEL Classification: K13, L15, L13, D82
Suggested Citation: Suggested Citation
Daughety, Andrew F. and Reinganum, Jennifer F., Economic Analysis of Products Liability: Theory (May 11, 2011). RESEARCH HANDBOOK ON THE ECONOMICS OF TORTS, Jennifer H. Arlen, ed., Edward Elgar Ltd., Forthcoming; Vanderbilt Law and Economics Research Paper No. 11-29. Available at SSRN: https://ssrn.com/abstract=1838540 or http://dx.doi.org/10.2139/ssrn.1838540