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.
- Language
-
Englisch
- Bibliographic citation
-
Series: CSIO Working Paper ; No. 0042
- Classification
-
Wirtschaft
- Subject
-
Produkthaftung
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Hay, Bruce
Spier, Kathryn E.
- Event
-
Veröffentlichung
- (who)
-
Northwestern University, Center for the Study of Industrial Organization (CSIO)
- (where)
-
Evanston, IL
- (when)
-
2004
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hay, Bruce
- Spier, Kathryn E.
- Northwestern University, Center for the Study of Industrial Organization (CSIO)
Time of origin
- 2004
Other Objects (12)
Probing the case for manufacturer liability for harms caused by judgment-proof consumers to others
Optimal Liability when Consumers Mispredict Product Usage
Switching consumers and product liability: on the optimality of incomplete strict liability
Civil liability for damage caused by waste
State Liability for Failure to Protect Others. Srebrenica Cases
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Liability for third-party harm when harm-inflicting consumers are present biased
Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation
Liability games
Limited Liability
Probing the case for manufacturer liability for harms caused by judgment-proof consumers to others
Optimal Liability when Consumers Mispredict Product Usage
Switching consumers and product liability: on the optimality of incomplete strict liability
Civil liability for damage caused by waste
State Liability for Failure to Protect Others. Srebrenica Cases
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Liability for third-party harm when harm-inflicting consumers are present biased
Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation
Liability games
Limited Liability
Probing the case for manufacturer liability for harms caused by judgment-proof consumers to others
Optimal Liability when Consumers Mispredict Product Usage
Switching consumers and product liability: on the optimality of incomplete strict liability
Civil liability for damage caused by waste
State Liability for Failure to Protect Others. Srebrenica Cases
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Firm Liability When Third Parties and Consumers Incur Cumulative Harm
Liability for third-party harm when harm-inflicting consumers are present biased
Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation
Liability games