Precaution v. avoidance: A comparison of liability rules

Tim Friehe

Economics Letters, 2009, vol. 105, issue 3, 214-216

Abstract: The economic analysis of liability rules sponsors strict liability in the case that only injurers can take care to affect expected harm. Yet, negligence is usually the base line in jurisdictions around the world. We establish that negligence is superior if injurers can invest in both care-taking and avoidance activities.

Keywords: Liability; rules; Care; incentives; Avoidance; activities; Strict; liability; Negligence (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:105:y:2009:i:3:p:214-216

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