Strict Liability and Negligence with Search for Precautionary Measures

Florian Baumann and Tim Friehe

American Law and Economics Review, 2021, vol. 23, issue 2, 307-347

Abstract: This article explores the performance of strict liability and negligence when agents initially have imperfect information about what care options exist to influence expected accidental harm. A technology that establishes a basic level of care is commonly known in our framework, but whether a superior one exists is uncertain. Injurers and/or victims can engage in a costly search to find out. For this setup, we show that strict liability can induce lower social costs than negligence when the superior care technology’s existence is moderately likely and agents’ search costs are high, a combination likely to apply to new and complex activities. Instead, negligence is socially preferred when the superior care technology’s existence is either very likely or very unlikely, or when search costs are low, configurations likely to apply to well-established activities.

Keywords: K13 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/aler/ahab009 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:amlawe:v:23:y:2021:i:2:p:307-347.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

American Law and Economics Review is currently edited by J.J. Prescott and Albert Choi

More articles in American Law and Economics Review from American Law and Economics Association Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().