Firm Liability When Third Parties and Consumers Incur Cumulative Harm

Elisabeth Schulte, Tim Friehe and Eric Langlais

VfS Annual Conference 2021 (Virtual Conference): Climate Economics from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes liability rules when consumers and third parties/the environment incur harm. Expected harm is convex in the level of output and modeled as a power function. We show that the social ranking of liability rules previously established for the case in which only consumers suffer harm (strict liability dominates no liability and negligence) may be reversed if harm to third parties or the environment is sufficiently important.

Keywords: Liability; Cumulative harm; Environmental harm (search for similar items in EconPapers)
JEL-codes: K13 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-bec, nep-com, nep-law and nep-ore
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https://www.econstor.eu/bitstream/10419/242339/1/vfs-2021-pid-48497.pdf (application/pdf)

Related works:
Journal Article: Firm Liability When Third Parties and Consumers Incur Cumulative Harm (2022)
Working Paper: Firm liability when third-parties and consumers incur cumulative harm (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc21:242339

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