Chapter

Corporate Risk Analysis: A Reckless Act?

W. Kip Viscusi

in Punitive Damages

Published by University of Chicago Press

Published in print April 2002 | ISBN: 9780226780146
Published online March 2013 | e-ISBN: 9780226780160 | DOI: http://dx.doi.org/10.7208/chicago/9780226780160.003.0011
Corporate Risk Analysis: A Reckless Act?

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Many instances of juror responses to what could be considered routine corporate product-safety decision making raise questions about how jurors think about punitive damages awards in products liability cases. Trading off risk against cost is a common experience. To decide which risks to bear and which to avoid, we can attempt to get a sense of how consequential the risks are and whether there is some offsetting advantage that makes bearing the risk reasonable. In designing their products, corporations also must make similar judgments regarding the character of their products. To do so, they try to anticipate how their products will be used and what risks will be incurred in that usage. Another factor they must consider is consumer preferences, especially how much customers value safety as opposed to other product attributes, including its price. The formal mechanism for making safety trade-off judgments is a risk analysis that outlines the costs and benefits of different safety options. Such an analysis usually proceeds in a series of steps.

Keywords: corporate risk analysis; product-safety decision making; product liability; punitive damages; risk analysis; safety options

Chapter.  7729 words. 

Subjects: Company and Commercial Law

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