A rule of strict liability leads to...

Question

BlackTom AI · Accepted Answer

To analyze the effect of a strict liability rule, consider who bears the cost of harm and how that affects incentives.
Option 1: efficient precaution by injurers but not by victims. Under strict liability, the injurer is responsible for damages regardless of fault, so the expected cost to the injurer includes the potential harm. This creates an incentive for the injurer to take efficient precautions to reduce the probability of loss. The victim, however, typically faces no liability for the harm they suffer, so the victim does not incur a cost from non-precaution in the same way. As a result, the victim has little to gain from taking precautions, making efficient precautions by victims unlikely under strict liability.
Option 2: efficient precaution by victims but not by injurers. This would require victims to bear the costs of harms they suffer in a way that motivates them to prevent harm, or for the rule to deter injurers more than victims. Under strict liability, the burden is on the injurer, not the victim, so the incentive for victims to take precautions is weaker or absent. Therefore this option misstates the incentive structure created by strict liability.
Option 3: efficient precaution by both injurers and victims. For both parties to independently take efficient precautions, each would need to internalize the total expected harm. With strict liability placing the burden on the injurer (and not on the victim), the victim does not face a cost from their own lack of precaution, which dampens the incentive for victims to invest in safety. Hence, simultaneous efficient precautions by both parties is not the typical outcome of strict liability.
In sum, under a rule of strict liability the injurer internalizes the cost of harm and has a strong incentive to minimize risk, while the victim does not bear liability and thus has weaker incentive to take precaution. This aligns with the first option and misaligns with the other two statements.

SU25 ECON 522 001 ZFF Self Quiz, Week 4 part 2

A rule of strict liability leads to...

View Explanation

Log in for full answers

Similar Questions

Under what legal doctrine does a firm bear legal responsibility for injuries caused by something it made or sold, whether or not it was negligent?

An example of an ultra-hazardous activity is the manufacturing of dynamite.

In a strict liability case, if it can be proved that a business was as careful as possible about its product or service, it is not held liable for the harm that results from its use.

Consolidated Trucking Company transports radioactive materials. Darla suffers from cancer. To succeed in a strict liability action against Consolidated, Darla must show that her injury was caused by

Strict liability in tort requires proof that the defendant’s conduct was intentional.

Strict liability may hold manufacturers responsible for their products even if they acted with due diligence and reasonable care.

To sue for strict liability, privity is not required.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler