Product-Related Risk and Cognitive Biases: The Shortcomings of Enterprise Liability

Roger Williams Law Review, Vol. 6, No. 1

60 Pages Posted: 16 Feb 2001

Abstract

Products liability law has witnessed a long debate over whether manufacturers should be held strictly liable for the injuries that products cause. Recently, some have argued that psychological research on human judgment supports adopting a regime of strict enterprise liability for injuries caused by product design. These new proponents of enterprise liability argue that the current system, in which manufacturer liability for product design turns on the manufacturer's negligence, allows manufacturers to induce consumers into undertaking inefficiently dangerous levels or types of consumption. In this paper we argue that the new proponents of enterprise liability have: (1) not provided any more than anecdotal evidence for their thesis; (2) failed to account for the mechanisms the law already has available to counter manufacturer manipulation of consumers; and (3) made no effort to address the well-known problems enterprise liability creates. Furthermore, even on its own terms, the new arguments for enterprise liability fail to consider the tendency of some manufacturers to exacerbate the risks that some products pose ? a tendency that enterprise liability would exacerbate. In short, the insights gleaned from psychological research on human judgment do not support adopting a system of strict enterprise liability for products.

Keywords: torts, products liability

JEL Classification: K13

Suggested Citation

Henderson, James A. and Rachlinski, Jeffrey John, Product-Related Risk and Cognitive Biases: The Shortcomings of Enterprise Liability. Roger Williams Law Review, Vol. 6, No. 1. Available at SSRN: https://ssrn.com/abstract=256724 or http://dx.doi.org/10.2139/ssrn.256724

James A. Henderson

Cornell Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States
(607) 255-2303 (Phone)
607 255-7193 (Fax)

Jeffrey John Rachlinski (Contact Author)

Cornell Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States
607-255-5878 (Phone)
607-255-7193 (Fax)

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