Document Type
Article
Publication Date
1990
Abstract
This Article explores the insurance and deterrence implications of important and long overlooked facts. Consumers are insured through first-party mechanisms against most of the risks of product accidents. However, first-party insurers rarely and imperfectly adjust premiums according to an individual consumer's decisions concerning exactly what products she will purchase, how many of those products she will purchase, and how carefully she will consume them. Such consumer decisions we refer to as "consumption choices. " This failure by first-party insurers to adjust premiums according to consumption choices gives rise to a first-party insurance externality. Based on this insight, this Article offers an economic justification for an "enterprise liability" regime that does not recognize the defense of contributory negligence.
Recommended Citation
Logue, Kyle D. "The First-Party Insurance Externality: An Economic Justification for Enterprise Liability." J. D. Hanson, co-author. Cornell L. Rev. 76, no. 1 (1990): 129-96.
Included in
Consumer Protection Law Commons, Insurance Law Commons, Law and Economics Commons, Torts Commons
Comments
Work published when author not on Michigan Law faculty.