IDEAS home Printed from https://ideas.repec.org/a/bpj/rlecon/v4y2008i1n9.html
   My bibliography  Save this article

A Positive Theory of Strict Liability

Author

Listed:
  • Hylton Keith N

    (Boston University)

Abstract

In spite of its tenure as the prevailing economic theory of strict liability, the proposition that strict liability should be preferred to negligence when it is desirable to reduce injurers' activity levels rather than victims' activity levels raises a few questions. First, when should we prefer to reduce injurers' activity levels rather than victims'? Second, why should we not hold both victim and injurer strictly liable? This paper provides a model that answers these questions more effectively than the prevailing economic model. The model presented here offers specific predictions that are consistent with the detailed law on strict liability and the appearance of strict liability in pockets rather than as an across-the-board default rule. The choice between strict liability and negligence depends on the degree to which there is a reciprocal exchange of risk among actors, and the extent to which benefits, in addition to risks, are externalized.

Suggested Citation

  • Hylton Keith N, 2008. "A Positive Theory of Strict Liability," Review of Law & Economics, De Gruyter, vol. 4(1), pages 153-181, June.
    • Handle: RePEc:bpj:rlecon:v:4:y:2008:i:1:n:9
    DOI: 10.2202/1555-5879.1221
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1555-5879.1221
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1555-5879.1221?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Aaron S. Edlin & Pinar Karaca-Mandic, 2006. "The Accident Externality from Driving," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 931-955, October.
    2. Arlen, Jennifer H, 1992. "Liability for Physical Injury When Injurers as Well as Victims Suffer Losses," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 8(2), pages 411-426, April.
    3. Hylton, Keith N, 1990. "Costly Litigation and Legal Error under Negligence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(2), pages 433-452, Fall.
    4. Michael Spence, 1977. "Consumer Misperceptions, Product Failure and Producer Liability," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 561-572.
    5. Polinsky, A Mitchell, 1980. "Strict Liability vs. Negligence in a Market Setting," American Economic Review, American Economic Association, vol. 70(2), pages 363-367, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Terence Centner, 2010. "New state liability exceptions for agritourism activities and the use of liability releases," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 27(2), pages 189-198, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joshua Schwartzstein & Andrei Shleifer, 2013. "An Activity-Generating Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 56(1), pages 1-38.
    2. Dari-Mattiacci, Giuseppe & Langlais, Eric, 2012. "Social Wealth and Optimal Care," International Review of Law and Economics, Elsevier, vol. 32(2), pages 271-284.
    3. Deffains, Bruno & Demougin, Dominique, 2008. "Customary versus technological advancement tests," International Review of Law and Economics, Elsevier, vol. 28(2), pages 106-112, June.
    4. Andrew F. Daughety & Jennifer F. Reinganum, 2013. "Economic analysis of products liability: Theory," Chapters, in: Jennifer H. Arlen (ed.), Research Handbook on the Economics of Torts, chapter 3, pages 69-96, Edward Elgar Publishing.
    5. Bruce Hay & Kathryn E. Spier, 2005. "Manufacturer Liability for Harms Caused by Consumers to Others," American Economic Review, American Economic Association, vol. 95(5), pages 1700-1711, December.
    6. Bruce Hay & Kathryn E. Spier, 2004. "Manufacturer Liability for Harms Caused by Consumers to Others," NBER Working Papers 10972, National Bureau of Economic Research, Inc.
    7. Andrew F. Daughety & Jennifer F. Reinganum, 2014. "Cumulative Harm and Resilient Liability Rules for Product Markets," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(2), pages 371-400.
    8. Terrence August & Tunay I. Tunca, 2011. "Who Should Be Responsible for Software Security? A Comparative Analysis of Liability Policies in Network Environments," Management Science, INFORMS, vol. 57(5), pages 934-959, May.
    9. Steven Shavell, 2005. "Liability for Accidents," NBER Working Papers 11781, National Bureau of Economic Research, Inc.
    10. Emanuela Carbonara & Alice Guerra & Francesco Parisi, 2016. "Sharing Residual Liability: The Cheapest Cost Avoider Revisited," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 173-201.
    11. Eric Langlais & Andreea Cosnita-Langlais & Tim Friehe, 2024. "Product Liability Influences Incentives for Horizontal Mergers," EconomiX Working Papers 2024-10, University of Paris Nanterre, EconomiX.
    12. J. K. Pappalardo, 2022. "Economics of Consumer Protection: Contributions and Challenges in Estimating Consumer Injury and Evaluating Consumer Protection Policy," Journal of Consumer Policy, Springer, vol. 45(2), pages 201-238, June.
    13. Roman Inderst & Marco Ottaviani, 2013. "Sales Talk, Cancellation Terms and the Role of Consumer Protection," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 1002-1026.
    14. Robert Cooter & Ariel Porat, 2007. "Total Liability for Excessive Harm," The Journal of Legal Studies, University of Chicago Press, vol. 36(1), pages 63-80, January.
    15. Tomas J. Philipson & Eric Sun, 2008. "Is the Food And Drug Administration Safe And Effective?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 85-102, Winter.
    16. Hochman, Oded & Rausser, Gordon C., 1999. "Zoning as a control of pollution in a spatial environment," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0qq9849t, Department of Agricultural & Resource Economics, UC Berkeley.
    17. Jeong-Yoo Kim, 2024. "Law and Economics of Artificial Intelligence: Optimal Liability Rules for Accident Losses Caused by Fully Autonomous Vehicles," Korean Economic Review, Korean Economic Association, vol. 40, pages 49-75.
    18. Junhong Chu & Pradeep K. Chintagunta, 2009. "Quantifying the Economic Value of Warranties in the U.S. Server Market," Marketing Science, INFORMS, vol. 28(1), pages 99-121, 01-02.
    19. Stefan Bauernschuster & Timo Hener & Helmut Rainer, 2017. "When Labor Disputes Bring Cities to a Standstill: The Impact of Public Transit Strikes on Traffic, Accidents, Air Pollution, and Health," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 1-37, February.
    20. W. Bentley MacLeod, 2006. "Reputations, Relationships and the Enforcement of Incomplete Contracts," CESifo Working Paper Series 1730, CESifo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:rlecon:v:4:y:2008:i:1:n:9. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.