percent of mean income. In this paper we use economic theory to determine the relation between the appropriate make …

percent of mean income. In this paper we use economic theory to determine the relation between the appropriate make …

economic theory to address this issue. We find that the relation between the appropriate compensation and the mean and median …

In the economic analysis of liability law, information about accident risk and how it can be influenced by precautions … is commonly taken for granted. However, a profound understanding of the relationship between care and accident risk often … strict liability and negligence, showing that liability law may not induce efficient incentives. …

In a world with risk-neutral agents, liability rules will only induce efficient behaviour if these rules impose the … are not related to the occurrence of an accident. Such a mechanism requires individuals to violate the standard of care in …

Limited liability may result in inefficient accident prevention, because a relevant portion of the expected harm is … externalized on victims. This paper shows that under some restrictive conditions further limiting liability by means of a liability …

transfer of wealth from the victim to a third party, whose earnings increase as a consequence of the accident. Such transfers …). Finally, we offer considerations on the optimal design of liability rules. …

We contrast alternative liability rules for social control of product risks when heterogeneous consumers considering …' mispredictions vary with the prevailing liability regime. We first characterize the consumers' purchasing decision and the … equilibrium levels of safety and activity from the product's usage under no liability, strict liability, and negligence rule. We …

the case with toxic torts. Risk aversion and ambiguity aversion tend to have a similar impact on optimal liability rules … liability dominates negligence when the injurer has lower degrees of risk and ambiguity aversion than the victim and can …

plays an important role in the choice between liability rules. Specifically, positively correlated harms favor a liability … liability rule that pools risks together, as in strict liability. The same applies when parties can purchase costly insurance … (first party or third party). This policy recommendation is in line with current products liability law, which places design …