Liability rules can deter harmful behavior from "summary" of Economic Analysis of Law by Richard A. Posner
Liability rules create incentives for individuals to avoid engaging in harmful behavior by making them financially responsible for the harm they cause to others. For example, a driver who knows that they will have to pay for any damages they cause in an accident is more likely to drive carefully and follow traffic laws. This is because the potential cost of causing an accident serves as a deterrent. By imposing liability on individuals for the harm they cause, the legal system can influence behavior in a way that benefits society as a whole. In the absence of liability rules, individuals may not take into account the full cost of their actions, leading to inefficient outcomes. For instance, a manufacturer may not inves...
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