Innovation, Tort Law, and Competition

24 Pages Posted: 10 Jan 2012

See all articles by Klaus Heine

Klaus Heine

Erasmus University Rotterdam (EUR), Erasmus School of Law

Florian Baumann

University of Tuebingen - Faculty of Economics and Business Administration

Date Written: January 10, 2012

Abstract

In this paper, we examine the link between innovative activity on the part of firms, the competitive pressure to introduce innovations and punitive damage awards. While innovative activity brings forth valuable new products for consumers, competitive pressure in the ensuing innovation race induces firms to launch innovations too early, thereby raising the likelihood of severe product risks above the optimal failure rate. Introducing innovations too early may call for the application of punitive damages instead of mere compensation of harm caused, in order to decelerate such welfare-reducing innovation races.

Keywords: competition, innovation, punitive damages, tort law

JEL Classification: L13, K13, O31

Suggested Citation

Heine, Klaus and Baumann, Florian, Innovation, Tort Law, and Competition (January 10, 2012). Available at SSRN: https://ssrn.com/abstract=1982476 or http://dx.doi.org/10.2139/ssrn.1982476

Klaus Heine (Contact Author)

Erasmus University Rotterdam (EUR), Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands

Florian Baumann

University of Tuebingen - Faculty of Economics and Business Administration ( email )

Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
125
rank
222,241
Abstract Views
1,539
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information