IDEAS home Printed from https://ideas.repec.org/a/kap/ejlwec/v57y2024i1d10.1007_s10657-024-09794-z.html
   My bibliography  Save this article

Product liability for defective AI

Author

Listed:
  • Miriam C. Buiten

    (University of St. Gallen, Law School
    CERRE)

Abstract

This paper studies the efficient definition of product defects for AI systems with autonomous capabilities. It argues that defining defects in product liability law is central to distributing responsibility between producers and users. The paper proposes aligning the standard for defect with the relative control over and awareness of product risk possessed by the producer and the user. AI systems disrupt the traditional balance of control and risk awareness between users and producers. The paper provides suggestions for defining AI product defects in a way that promotes an efficient allocation of liability in AI-related accidents. It assesses whether the recent EU policy proposal on product liability aligns with this approach.

Suggested Citation

  • Miriam C. Buiten, 2024. "Product liability for defective AI," European Journal of Law and Economics, Springer, vol. 57(1), pages 239-273, April.
    • Handle: RePEc:kap:ejlwec:v:57:y:2024:i:1:d:10.1007_s10657-024-09794-z
    DOI: 10.1007/s10657-024-09794-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10657-024-09794-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10657-024-09794-z?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. Giuseppe Dari-Mattiacci & Luigi Alberto Franzoni, 2014. "Innovative Negligence Rules," American Law and Economics Review, American Law and Economics Association, vol. 16(2), pages 333-365.
    2. Albert H. Choi & Kathryn E. Spier, 2014. "Should Consumers be Permitted to Waive Products Liability? Product Safety, Private Contracts, and Adverse Selection," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(4), pages 734-766.
    3. De Mot, Jef & Depoorter, Ben, 2011. "Technology and torts: Memory costs, nondurable precautions and interference effects," International Review of Law and Economics, Elsevier, vol. 31(4), pages 284-290.
    4. Andrea Castellano & Fernando Tohmé & Omar O. Chisari, 2020. "Product liability under ambiguity," European Journal of Law and Economics, Springer, vol. 49(3), pages 473-487, June.
    5. Steven Shavell, 2020. "On the Redesign of Accident Liability for the World of Autonomous Vehicles," The Journal of Legal Studies, University of Chicago Press, vol. 49(2), pages 243-285.
    6. Walter Y. Oi, 1973. "The Economics of Product Safety," Bell Journal of Economics, The RAND Corporation, vol. 4(1), pages 3-28, Spring.
    7. Roland N. McKean, 1970. "Products Liability: Implications of Some Changing Property Rights," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(4), pages 611-626.
    8. Alessandro Lizzeri, 1999. "Information Revelation and Certification Intermediaries," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 214-231, Summer.
    9. 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.
    10. repec:reg:rpubli:575 is not listed on IDEAS
    11. 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.
    12. Steven Shavell, 1984. "A Model of the Optimal Use of Liability and Safety Regulation," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 271-280, Summer.
    13. 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.
    14. Dawid, Herbert & Muehlheusser, Gerd, 2022. "Smart products: Liability, investments in product safety, and the timing of market introduction," Journal of Economic Dynamics and Control, Elsevier, vol. 134(C).
    15. 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).
    16. Grady Mark F., 2009. "Unavoidable Accident," Review of Law & Economics, De Gruyter, vol. 5(1), pages 177-231, April.
    17. Yongmin Chen & Xinyu Hua, 2012. "Ex Ante Investment, Ex Post Remedies, And Product Liability," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 845-866, August.
    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. Eric Langlais & Nanxi Li, 2024. "Which Liability Laws for Artificial Intelligence?," Working Papers hal-04638448, HAL.

    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. Marie Obidzinski & Yves Oytana, 2022. "Prediction, human decision and liability rules, CRED Working paper No 2022-06," Working Papers hal-04034871, HAL.
    2. Florian Baumann & Tim Friehe & Alexander Rasch, 2018. "Product Liability in Markets for Vertically Differentiated Products," American Law and Economics Review, American Law and Economics Association, vol. 20(1), pages 46-81.
    3. 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).
    4. Marie Obidzinski & Yves Oytana, 2022. "Advisory algorithms and liability rules," Working Papers hal-04222291, HAL.
    5. Marie Obidzinski & Yves Oytana, 2024. "Artificial intelligence, inattention and liability rules," Working Papers 2024-08, CRESE.
    6. Andrzej Baniak & Peter Grajzl, 2014. "Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation," CESifo Working Paper Series 5003, CESifo.
    7. 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.
    8. Dawid, Herbert & Muehlheusser, Gerd, 2022. "Smart products: Liability, investments in product safety, and the timing of market introduction," Journal of Economic Dynamics and Control, Elsevier, vol. 134(C).
    9. Dawid, Herbert & Di, Xuan & Kort, Peter M. & Muehlheusser, Gerd, 2024. "Autonomous vehicles policy and safety investment : An equilibrium analysis with endogenous demand," Other publications TiSEM a8b169e7-97f0-4b83-b117-a, Tilburg University, School of Economics and Management.
    10. Dawid, Herbert & Di, Xuan & Kort, Peter M. & Muehlheusser, Gerd, 2024. "Autonomous vehicles policy and safety investment: An equilibrium analysis with endogenous demand," Transportation Research Part B: Methodological, Elsevier, vol. 182(C).
    11. Kort, Peter & Lavrutich, Maria & Nunes, Cláudia & Oliveira, Carlos, 2023. "Preventive investment, malfunctions and liability," International Journal of Production Economics, Elsevier, vol. 263(C).
    12. Andrzej Baniak & Peter Grajzl, 2016. "Controlling Product Risks when Consumers Are Heterogeneously Overconfident: Producer Liability versus Minimum-Quality-Standard Regulation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(2), pages 274-304, June.
    13. Ram Singh, 2009. "RISK, INFORMATIONAL ASYMMETRY AND PRODUCT LIABILITY: An Enquiry Into Conflicting Objectives," Pacific Economic Review, Wiley Blackwell, vol. 14(1), pages 89-112, February.
    14. Baniak Andrzej & Grajzl Peter, 2013. "Equilibrium and Welfare in a Model of Torts with Industry Reputation Effects," Review of Law & Economics, De Gruyter, vol. 9(2), pages 265-302, October.
    15. Andrea Castellano & Fernando Tohmé & Omar O. Chisari, 2020. "Product liability under ambiguity," European Journal of Law and Economics, Springer, vol. 49(3), pages 473-487, June.
    16. Yassine Lefouili & Leonardo Madio, 2022. "The economics of platform liability," European Journal of Law and Economics, Springer, vol. 53(3), pages 319-351, June.
    17. George, Donald A R, 2012. "Technical progress and product reliability under competition and monopoly," SIRE Discussion Papers 2012-23, Scottish Institute for Research in Economics (SIRE).
    18. Charreire, Maxime & Langlais, Eric, 2021. "Should environment be a concern for competition policy when firms face environmental liability?," International Review of Law and Economics, Elsevier, vol. 67(C).
    19. Florian Baumann & Tim Friehe & Alexander Rasch, 2015. "The Influence of Product Liability on Vertical Product Differentiation," CESifo Working Paper Series 5315, CESifo.
    20. Christoph Rössler & Tim Friehe, 2020. "Liability, morality, and image concerns in product accidents with third parties," European Journal of Law and Economics, Springer, vol. 50(2), pages 295-312, October.

    More about this item

    Keywords

    Liability rules; Artificial intelligence; EU product liability;
    All these keywords.

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

    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:kap:ejlwec:v:57:y:2024:i:1:d:10.1007_s10657-024-09794-z. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.