A Positive Theory of Strict Liability

30 Pages Posted: 28 Sep 2006 Last revised: 26 Jan 2008

See all articles by Keith N. Hylton

Keith N. Hylton

Boston University - School of Law

Abstract

In spite of its tenure as the prevailing economic theory of strict liability, the proposition that strict liability should be preferred to negligence when it is desirable to reduce injurers' activity levels rather than victims' activity levels raises a few questions. First, when should we prefer to reduce injurers' activity levels rather than victims'? Second, why should we not hold both victim and injurer strictly liable? This paper provides a model that answers these questions more effectively than the prevailing economic model. The model presented here offers specific predictions that are consistent with the detailed law on strict liability and the appearance of strict liability in pockets rather than as an across-the-board default rule. The choice between strict liability and negligence depends on the degree to which there is a reciprocal exchange of risk among actors, and the extent to which benefits, in addition to risks, are externalized.

Keywords: strict liability, negligence, economic theory of strict liability, exchange of risk among actors, externalized benefits

JEL Classification: K00, K13, K41, K32, K00

Suggested Citation

Hylton, Keith N., A Positive Theory of Strict Liability. Review of Law & Economics, 2008; Boston University School of Law Working Paper No. 06-35. Available at SSRN: https://ssrn.com/abstract=932600

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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