Arbeitspapier
Manufacturer Liability for Harms Caused by Consumers to Others
This paper investigates whether manufacturers should be liable if consumers, through the use of a product, cause harm to others. If consumers have deep pockets then consumeronly liability is socially desirable. With consumer insolvency, however, consumer-only liability leads to inadequate consumer precautions, inadequate safety features, and excessive economic activity. With homogeneous insolvent consumers, the best rule is "residual-manufacturer liability" where the consumer bears primary responsibility and the manufacturer bears the shortfall in damages. When consumers' willingness-to-pay is correlated with social harm they cause then residual-manufacturer liability distorts the market quantity. When consumers differ in their wealth then residual manufacturer liability creates an inefficient cross-subsidization and an overprovision of safety features. In both cases, consumer-only liability may be preferred to residual-manufacturer liability. Applications, including gun manufacturer liability, are discussed.
- Sprache
-
Englisch
- Erschienen in
-
Series: CSIO Working Paper ; No. 0042
- Klassifikation
-
Wirtschaft
- Thema
-
Produkthaftung
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Hay, Bruce
Spier, Kathryn E.
- Ereignis
-
Veröffentlichung
- (wer)
-
Northwestern University, Center for the Study of Industrial Organization (CSIO)
- (wo)
-
Evanston, IL
- (wann)
-
2004
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Hay, Bruce
- Spier, Kathryn E.
- Northwestern University, Center for the Study of Industrial Organization (CSIO)
Entstanden
- 2004
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