An Activity-Generating Theory of Regulation
AbstractWe propose an activity-generating theory of regulation. When courts make errors, tort litigation becomes unpredictable and as such imposes risk on firms, thereby discouraging entry, innovation, and other socially desirable activity. When social returns to activity are higher than private returns, it may pay the society to generate some information ex ante about how risky firms are and to impose safety standards based on that information. In some situations, compliance with such standards should entirely preempt tort liability; in others, it should merely reduce penalties. By reducing litigation risk, this type of regulation can raise welfare.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by University of Chicago Press in its journal The Journal of Law and Economics.
Volume (Year): 56 (2013)
Issue (Month): 1 ()
Pages: 1 - 38
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JLE/
Other versions of this item:
- Joshua Schwartzstein & Andrei Shleifer, . "An Activity-Generating Theory of Regulation," Working Paper 19524, Harvard University OpenScholar.
- Joshua Schwartzstein & Andrei Shleifer, 2009. "An Activity-Generating Theory of Regulation," NBER Working Papers 14752, National Bureau of Economic Research, Inc.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Polinsky, A Mitchell, 1980. "Strict Liability vs. Negligence in a Market Setting," American Economic Review, American Economic Association, vol. 70(2), pages 363-67, May.
- Gary S. Becker, 1968.
"Crime and Punishment: An Economic Approach,"
Journal of Political Economy,
University of Chicago Press, vol. 76, pages 169.
- Nicola Gennaioli & Andrei Shleifer, 2006.
"Judicial Fact Discretion,"
NBER Working Papers
12679, National Bureau of Economic Research, Inc.
- Png, I. P. L., 1986. "Optimal subsidies and damages in the presence of judicial error," International Review of Law and Economics, Elsevier, vol. 6(1), pages 101-105, June.
- W. Kip Viscusi, 1991. "Product and Occupational Liability," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 71-91, Summer.
- Viscusi, W Kip & Moore, Michael J, 1993. "Product Liability, Research and Development, and Innovation," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 161-84, February.
- Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
- Kolstad, Charles D & Ulen, Thomas S & Johnson, Gary V, 1990. "Ex Post Liability for Harm vs. Ex Ante Safety Regulation: Substitutes or Complements?," American Economic Review, American Economic Association, vol. 80(4), pages 888-901, September.
- Banerjee, Abhijit V, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1289-1332, November.
- Immordino, Giovanni & Pagano, Marco & Polo, Michele, 2011.
"Incentives to innovate and social harm: Laissez-faire, authorization or penalties?,"
Journal of Public Economics,
Elsevier, vol. 95(7-8), pages 864-876, August.
- Immordino, Giovanni & Pagano, Marco & Polo, Michele, 2011. "Incentives to innovate and social harm: Laissez-faire, authorization or penalties?," Journal of Public Economics, Elsevier, vol. 95(7), pages 864-876.
- Immordino, Giovanni & Pagano, Marco & Polo, Michele, 2009. "Incentives to Innovate and Social Harm: Laissez-Faire, Authorization or Penalties?," CEPR Discussion Papers 7280, C.E.P.R. Discussion Papers.
- Giovanni Immordino & Marco Pagano & Michele Polo, 2009. "Incentives to Innovate and Social Harm:Laissez-Faire, Authorization or Penalties?," Working Papers 349, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Giovanni Immordino & Marco Pagano & Michele Polo, 2009. "Incentives to Innovate and Social Harm: Laissez-Faire, Authorization or Penalties?," CSEF Working Papers 220, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Scott Baker & Claudio Mezzetti, 2012.
"A Theory of Rational Jurisprudence,"
Journal of Political Economy,
University of Chicago Press, vol. 120(3), pages 513 - 551.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.