Innovative Negligence Rules
32 Pages Posted: 2 Mar 2013 Last revised: 5 May 2013
Date Written: February 20, 2013
We study how due-care standards can be conditioned on the technology adopted by the parties. We demonstrate that standards should be biased up or downwards, depending on the impact of the new technology on expected harm. Strict liability should be applied if new technologies that are able to reduce expected harm are available to the injurer; negligence should be selected if they are available to the victim. Finally, the negligence standard should be primarily based on safety (outcome) rather than precautionary expenditures (effort), so as to allow the benefits of innovation to be appropriated by the party bearing its cost.
Keywords: technology, activity level, care, accident, liability
JEL Classification: K13, K32
Suggested Citation: Suggested Citation