Should the manufacturer of a product be held legally responsible when a consumer, while using the product, harms someone else? We show that if consumers have deep pockets then manufacturer liability is not economically efficient. It is more efficient for the consumers themselves to bear...

An ELI Innovation Paper seeks to set out concrete propositions for European Legal Development in a short paper, which is more tentative in nature and which does not represent the result of comprehensive research; rather, it seeks to spark discussion and to inspire further action. In this spirit,...

This paper considers product recall under a perfect regime of strict liability. We show that safety is under supplied given output due to an under internalization of infra-marginal units. If we add a mandatory refund with a possible penalty fee in the event that the product turns out to be...

In this paper we examine the effects of limited liability on mortgage dynamics. While the literature has focused on default rates, renegotiation, or loan rates individually, we study them together as equilibrium outcomes of the strategic interaction between lenders and borrowers. We present a...

Financial innovation provides an accommodating avenue for parties to develop strategic means to prevent or avoid risk by spreading it across the financial system through efficient transferral to other parties. This transferral is done in numerous ways, the most notorious of which is through...

In this paper we examine the effects of limited liability on mortgage dynamics. While the literature has focused on default rates, renegotiation, or loan rates individually, we study them together as equilibrium outcomes of the strategic interaction between lenders and borrowers. We present a...

This paper is motivated by major food product recall events in recent years, especially how the timely and effective response using post-recall management can make a difference. We consider the rare but very influential major product recalls as disruptions to the supply chain and incorporate...

The large number of recalled products, the low proportion of recalled products returned for repair or replacement, and the high costs (lawsuits, communication, product repair and/or replacement, government agency fines and lost sales, etc.) associated with product recalls indicate the need for...