The economics of Covid-19 liability

The more you are interested in test, track, and trace, the more you should favor at least partial liability waivers for business, at least that is how I see it.  Here is an excerpt from a new paper by Daniel Jacob Hemel and Daniel B. Rodriguez:

Ex ante (before an exposure), the specter of liability generates incentives for businesses to take precautions that reduce the risk of virus transmission. Ex post (after an exposure), fear of liability may deter businesses from proactively informing customers and workers that they have been exposed to the virus through the business’s operations. The desire on the part of businesses to spare themselves from litigation may interfere with comprehensive contact-tracing efforts. To minimize the potentially perverse ex-post consequences of liability without sacrificing significant ex-ante benefits, the article proposes a limited safe harbor from liability for businesses that promptly contact customers and workers after learning about a possible exposure.

Again, here is my short liability study with Trace Mitchell of Mercatus.


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