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    Product Liability and Regulation: Establishing the Appropriate Institutional Division of Labor

    Viscusi, W. Kip
    : http://hdl.handle.net/1803/7071
    : 2012

    Abstract

    Society has several institutional mechanisms that promote the control of product health and safety risks and compensation of the income losses that these risks generated. For risks traded in the market, economic forces at work foster each of these objectives. Social insurance programs, such as worker's compensation, promote the compensation objective directly and influence safety incentives through the meritrating procedure. Two additional institutional mechanisms, which are the focus of this paper, are tort liability and regulation. Each of these institutions has assumed a more active role in the last two decades and has been the focus of considerable academic and policy debate.
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