Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103145
Authors: 
Baniak, Andrzej
Grajzl, Peter
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 5003
Abstract: 
Contributing to the literature on the consequences of behavioral biases for market outcomes and institutional design, we contrast producer liability and minimum quality standard regulation as alternative means of social control of product-related torts when consumers are heterogeneously overconfident about the risk of harm. We elucidate the role of factors shaping the relative desirability of strict liability vis-à-vis minimum quality standard regulation from a social welfare standpoint. We also clarify when and why joint use of strict liability and minimum quality standard regulation welfare dominates the exclusive use of either mode of social control of torts.
Subjects: 
product risk
overconfidence
consumer heterogeneity
tort law
minimum quality standard
JEL: 
K13
L51
D81
D03
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.