Law Commons^™

Market Incentives For Safety, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

In the heated atmosphere generated by inch-high headlines and multimillion-dollar liability suits, two important facts often get lost. First, society's awareness of what ensuring reasonably complete safety would cost rarely matches the intensity of its demands for such assurance. And second, the most powerful forces working to make products and workplaces safer are not the edicts of government but the dynamics of the market. True, there are situations in which the market cannot by itself create effective incentives for safety, but in the vast majority of cases it can-and does. Drawing on his extensive research into the regulation of risk, …