Tort Liability and Unawareness
52 Pages Posted: 29 May 2018 Last revised: 9 Apr 2019
Date Written: April 1, 2019
Unawareness is a form of bounded rationality where a person fails to conceive all feasible acts or consequences or to perceive as feasible all conceivable act-consequence links. We study the implications of unawareness for tort law, where relevant examples include the discovery of a new product or technology (new act), of a new disease or injury (new consequence), or that a product can cause an injury (new link). We argue that negligence has an important advantage over strict liability in a world with unawareness—negligence, through the stipulation of due care standards, spreads awareness about the updated probability of harm.
Keywords: negligence, strict liability, tort law, unawareness
JEL Classification: D83, K13
Suggested Citation: Suggested Citation