The Law and Economics of Products Liability

52 Pages Posted: 25 Jul 2012  

Keith N. Hylton

Boston University - School of Law

Date Written: July 25, 2012

Abstract

This paper presents a largely positive analysis of products liability law, in the sense that it aims to predict the incentive effects and the welfare consequences of the law, with close regard to its specific legal tests and the real-world constraints that impinge on these tests. The other major part of this paper is a normative assessment of the parts of products liability law that should be reformed. In contrast with the prevailing law and economics literature suggesting that products liability law reduces social welfare, I argue that the law probably improves social welfare, though it is in need of reform in several respects.

Keywords: products liability, strict liability, risk utility, consumer expectations, design defect, manufacturing defect, failure to warn

JEL Classification: K00, K13

Suggested Citation

Hylton, Keith N., The Law and Economics of Products Liability (July 25, 2012). Boston Univ. School of Law, Public Law Research Paper No. 12-39; Boston Univ. School of Law, Law and Economics Research Paper No. 12-39. Available at SSRN: https://ssrn.com/abstract=2117245 or http://dx.doi.org/10.2139/ssrn.2117245

Keith N. Hylton (Contact Author)

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-8959 (Phone)
617-353-3077 (Fax)

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