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How Liability Distorts Incentives Of Manufacturers To Recall Products, Omri Ben-Shahar
How Liability Distorts Incentives Of Manufacturers To Recall Products, Omri Ben-Shahar
Law & Economics Working Papers Archive: 2003-2009
The nature and likelihood of harms associated with products may be revealed over time. As more information is gathered, a manufacturer must decide whether to continue selling the product as is, or to recall it. The paper shows that existing products liability law gives the manufacturers bad incentive to recall products. It shows, counter-intuitively, that as the post-recall liability becomes more severe, manufacturers would be more likely to leave products in the market longer and more often than is socially desirable. It also demonstrates that the law hurts the incentives of manufacturers to acquire better information about the riskiness of …
Pain-And-Suffering Damages In Tort Law: Revisiting The Theoretical Framework And The Empirical Evidence, Ronen Avraham
Pain-And-Suffering Damages In Tort Law: Revisiting The Theoretical Framework And The Empirical Evidence, Ronen Avraham
Law & Economics Working Papers Archive: 2003-2009
Should there be pain-and-suffering damages in tort law? Most legal economists who wrote on the subject that there should not be pain-and-suffering damages in tort law. A minority of scholars thought the decision of whether tort law should provide pain-and-suffering damages is an empirical, or an experimental, question that cannot be armchair-theorized. Yet, all scholars who have done empirical or experimental work to explore the desirability of pain-and-suffering damages reached the conclusion that it is undesirable. In this paper I argue that the majority view cannot serve as a policy-making aid. I side with the minority of scholars who argue …