Learning-by-doing in torts: Liability and information about accident technology

Florian Baumann and Tim Friehe

Economics Letters, 2016, vol. 138, issue C, 1-4

Abstract: 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 requires learning-by-doing. In a two-period model, we examine the implications for the optimal level of care and behavior under strict liability and negligence, showing that liability law may not induce efficient incentives.

Keywords: Liability rules; Care incentives; Accident technology (search for similar items in EconPapers)
JEL-codes: D62 D83 K13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:138:y:2016:i:c:p:1-4

DOI: 10.1016/j.econlet.2015.10.041

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