Environmental Economics & Policy 6th Edition by Tom Tietenberg,Lynne Lewis

Exercise 5

Over the last several decades in product liability law, the court system has moved from a caveat emptor ("buyer beware") to caveat venditor ("seller beware") doctrine. In other words, the liability for using and consuming risky products has been shifted from buyers to sellers. Does this shift represent a movement toward or away from an efficient allocation of risk? Why?