Neoclassical Difficulties: Tort as Deterrence for Latent Injuries

Economists often claim that the tort system leads firms to provide consumers and workers with the socially optimal level of safety. Moreover, in the case of work-related hazards, employers are alleged to have another source of incentives to take precautions. If wages are sensitive to job-related risks, employers should spend money to reduce such risks when, by doing so, they can save more in wage costs than the costs of the precautions taken. Whatever their merits in other settings, in the case of latent injuries such as workplace exposure to asbestos neither tort nor market are likely to provide an optimal level of safety; indeed, they have failed to do so in the examples we discuss. We find that the introduction of a long delay between the exposure to a hazard and the onset of symptoms introduces a variety of empirical complications that overwhelm the assumptions on which the neoclassical model rests. Our conclusion is thus that comparisons between tort and alternative systems of deterrence/compensation should start from an empirical assessment of how the tort system actually works (and doesn\u27t work), rather than beginning with misleading theoretical claims about the system\u27s optimality

Neoclassical Difficulties: Tort as Deterrence for Latent Injuries

Economists often claim that the tort system leads firms to provide consumers and workers with the socially optimal level of safety. Moreover, in the case of work-related hazards, employers are alleged to have another source of incentives to take precautions. If wages are sensitive to job-related risks, employers should spend money to reduce such risks when, by doing so, they can save more in wage costs than the costs of the precautions taken. Whatever their merits in other settings, in the case of latent injuries such as workplace exposure to asbestos neither tort nor market are likely to provide an optimal level of safety; indeed, they have failed to do so in the examples we discuss. We find that the introduction of a long delay between the exposure to a hazard and the onset of symptoms introduces a variety of empirical complications that overwhelm the assumptions on which the neoclassical model rests. Our conclusion is thus that comparisons between tort and alternative systems of deterrence/compensation should start from an empirical assessment of how the tort system actually works (and doesn\u27t work), rather than beginning with misleading theoretical claims about the system\u27s optimality

The purchase of information technology products by Dutch SMEs : problem resolution

This research focuses on the purchase of information technology (IT) products by small and medium-sized enterprises (SMEs) in the Netherlands. Based on nationwide representative survey data (a total of 1,252 IT transactions), the research considers the problems that Dutch SMEs are faced with and the way in which these problems are dealt with. On average, 28 percent of transaction are completed without problems. If problems are encountered, they mostly involve inadequate documentation (45 percent of all transactions). Frequently mentioned problems, such as incompatibility with other IT products and being over budget, occur much less frequently (about 25 percent of all transactions). Moreover, strong support was found for the existence of a specific sequence in dealing with ex-post problems. Nearly all SMEs at least communicate the problem to the supplier; if that does not solve the issue, it is almost always followed by active deliberation with the supplier about a solution. If that does not help, about half of the SMEs impose some kind of sanction (most of the time delaying the payment). If that still does not settle the issue, virtually all SMEs give up on it. Third parties, such as arbitration committees or the courts, are rarely invoked