A common problem in applied economics is to determine the impact on consumers of changes in prices and attributes of marketed products as a consequence of policy changes. Examples are prospective regulation of product safety and reliability, or retrospective compensation for harm from defective...

We explore whether the composition of the physician work force is impacted by the clinical standards imposed on physicians under medical liability rules. We theorize that physicians of particular backgrounds will be attracted to regions when the malpractice laws of those regions favor the type...

The theory of insurance is considered here when an insured individual may be able to sue another party for the losses that the insured suffered--and thus when an insured has a potential source of compensation in addition to insurance coverage. Insurance policies reflect this possibility through...

Current academic and policy debates focus on the impact of tort reforms on physicians' behavior and medical costs. This paper examines whether these reforms also affect incentives to develop new technologies. We find that, on average, laws that limit the liability exposure of healthcare...

A central challenge in securing property rights is the subversion of justice through legal skill, bribery, or physical force by the strong--the state or its powerful citizens--against the weak. We present evidence that the less educated and poorer citizens in many countries feel their property...

When faced with financial uncertainty, rational agents have incentives to take steps ex ante to reduce the probability (self-protection) or size (self-insurance) of a loss. However, in the case of liability risk, especially physician responses to malpractice risk, most empirical analyses have...

Limited liability is a defining feature of the modern corporation, but it was not always so. By the early 1850s about one-half of all states imposed double liability on bank shareholders. This paper shows that double liability was adopted as deposits increased relative to banknotes and in...

After highly publicized lawsuits against McDonald's in 2002, 26 states adopted Commonsense Consumption Acts (CCAs) - aka 'Cheeseburger Bills' - that greatly limit fast food companies' liability for weight-related harms. We provide the first evidence of the effects of CCAs using plausibly...

This paper presents the first systematic theoretical and empirical study of high-low agreements in civil litigation. A high-low agreement is a private contract that, if signed by litigants before the conclusion of a trial, constrains any plaintiff recovery to a specified range. Whereas existing...

This article develops two points. First, insurance against the risk of legal change is largely unavailable, primarily because of the correlated nature of the losses that legal change generates. Second, given the absence of insurance against legal change, it is generally desirable for legal...