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Cumulative Harm, Products Liability, and Bilateral Care

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  • Andrew F. Daughety
  • Jennifer F. Reinganum

Abstract

We extend consideration of cumulative harm in products liability to the case of bilateral care. For this specification, the level of care and the level of output chosen by the firm are inextricably interrelated, and different liability regimes yield different combinations of care and output. As in the case of bilateral care with proportional harm, strict liability by itself leads to moral hazard on the part of the consumer, but strict liability with a defense of contributory negligence on the part of the consumer is now a resilient (that is, both robust and convergent) liability rule when harm is cumulative. Copyright 2013, Oxford University Press.

Suggested Citation

  • Andrew F. Daughety & Jennifer F. Reinganum, 2013. "Cumulative Harm, Products Liability, and Bilateral Care," American Law and Economics Review, American Law and Economics Association, vol. 15(2), pages 409-442.
    • Handle: RePEc:oup:amlawe:v:15:y:2013:i:2:p:409-442
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    File URL: http://hdl.handle.net/10.1093/aler/aht018
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    Cited by:

    1. Tim Friehe & Christoph Rößler & Xiaoge Dong, 2020. "Liability for Third-Party Harm When Harm-Inflicting Consumers Are Present Biased," American Law and Economics Review, American Law and Economics Association, vol. 22(1), pages 75-104.
    2. Eric Langlais & Tim Friehe & Elisabeth Schulte, 2019. "Product liability when cumulative harm is incurred by both consumers and third parties," EconomiX Working Papers 2019-23, University of Paris Nanterre, EconomiX.
    3. Campos, Sergio J. & Cotton, Christopher S. & Li, Cheng, 2015. "Deterrence effects under Twombly: On the costs of increasing pleading standards in litigation," International Review of Law and Economics, Elsevier, vol. 44(C), pages 61-71.
    4. De Chiara, Alessandro & Elizalde, Idoia & Manna, Ester & Segura-Moreiras, Adrian, 2021. "Car accidents in the age of robots," International Review of Law and Economics, Elsevier, vol. 68(C).
    5. Lam, Wing Man Wynne, 2016. "Attack-prevention and damage-control investments in cybersecurity," Information Economics and Policy, Elsevier, vol. 37(C), pages 42-51.
    6. Tim Friehe & Eric Langlais & Elisabeth Schulte, 2022. "Firm Liability When Third Parties and Consumers Incur Cumulative Harm," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(1), pages 53-71, January.

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