Transcript
  • 00:01    |    
    Initial credits
  • 00:20    |    
    Unilateral torts
    • Strict liability
    • Negligence rule
    • Civil liability
    • Effect of absence of tort law
  • 04:22.75    |    
    Bilateral care case
    • Model of pedestrian behavior
      • Costs
      • Benefits
      • Social benefit
    • Social benefit possibilities
    • Game theory
    • Strict liability
      • Incentive to drive moderately
      • Pedestrian's incentive to run
      • Dominant solution
      • Contributory negligence
      • High economic cost of contributory negligence
      • Lack of necessity to evaluate both parties' behavior
    • Negligence rule
      • Driver's payout
        • Pedestrian walks
        • Pedestrian runs
      • Cost to the pedestrian
      • Does the pedestrian have an incentive to walk because if he runs, he would bear the whole cost of an accident?
      • Does the negligence rule work because the pedestrian would rather bear a cost of 40 than one of 60?
      • Does the law providing incentives to act have similarities with the baseball example?
    • Utility and limitations of economic analysis
  • 37:55    |    
    Example of an accident from exploding product
    • Definition of widget
    • Chance of explosion
    • Minimization of total cost
  • 41:12    |    
    Game theory between consumer and manufacturer
  • Assumptions
  • 43:04    |    
    Payout possibilities under no liability
    • Consumer and manufacturer no care
    • Consumer no care and manufacturer care
    • Consumer care and manufacturer no care
    • Consumer and manufacturer care
    • Social cost solution
    • Dominant solutions
      • Manufacturer's incentive to not take care
      • Consumer's incentives
      • Iterative dominance
  • 55:47    |    
    Negligence rule with contributory negligence defense
    • Consumer and manufacturer no care
    • Consumer care and manufacturer no care
    • Consumer no care and manufacturer care
    • Consumer and manufacturer care
    • Dominant solution
      • Consumer's incentive to take care
      • Manufacturer's incentive to take care
    • Why is there a natural dominance for the manufacturer to not take care under no liability?
    • Difference between no liability and negligence rule with contributory defense
    • Economic consequences of legal rules
  • 01:05:55    |    
    Strict liability
    • Consumer and manufacturer no care
    • Consumer no care and manufacturer care
    • Consumer care and manufacturer no care
    • Consumer and manufacturer care
    • Dominant solution
      • Consumer's incentive to not care
      • Manufacturer's incentive to not care
      • Iterative dominance
    • Why isn't there natural dominance for the manufacturer under strict liability?
    • Ralph Nader's opinions
    • What kind of rule do we have to use in order to foster both parties' care?
    • Do product recalls occur because of strict liability rules?
    • Negligence rule in Guatemala
    • Negligence is presumed until the contrary is proved
    • Is there evidence that the negligence rule was better than strict liability?
    • Reasons for increasead number of lawsuits
    • Do expert witnesses ever explain the dangers of awarding damages under strict liability?
    • Don't juries determine the amount of the award?
    • Do expert witnesses influence the amount of the award?
    • In this example, shouldn't the incentive be for the manufacturer?
  • 01:32:43    |    
    Final credits


Economic Analysis of Law and Public Choice (Part 7)

New Media  | 27 de julio de 1995  | Vistas: 254

About this video

In this lecture, Dr. Michael Krauss uses the example of a car accident to compare strict liability and the negligence rule.  In this case, he also takes into consideration the pedestrian's behavior, whether he walks or runs, and concludes that a negligence rule with contributory defense ensures the social optimum.  Then, he analyzes the example of an accident resulting from an exploding product.  By using game theory, Dr. Krauss explains that strict liability (consumer protection rights) and no liability produce the same inefficient, careless outcome. Under the negligence rule, however, both parties have incentives to take care.



Credits

Economic Analysis of Law and Public Choice (Part 7)
Dr. Michael Krauss

Universidad Francisco Marroquín
Guatemala, July 27, 1995

New Media - UFM production.  Guatemala, January 2009
Conversion and digital editing: Mynor de León; index and synopsis: Christiaan Ketelaar; content revisers: Daphne Ortiz, Jennifer Keller; publication: Mario Pivaral / Carlos Petz


Conferencista

Michael Krauss is a professor of law at George Mason University…

IDEAS DE LA LIBERTAD

Nuestra misión es la enseñanza y difusión de los principios éticos, jurídicos y económicos de una sociedad de personas libres y responsables.

Universidad Francisco Marroquín