The Tort system and especially Product Liability is a socially costly tool to provide manufacturers with incentives for safety. Recently, it has been argued that market reputation could, to a significant extent, constitute a cheaper alternative to Product Liability. Our paper departs from the...

We study the standard economic model of unilateral accidents, in its simplest form, assuming that the injurers have limited assets. We identify a second-best optimal rule that selects as due care the minimum of first-best care, and a level of care that takes into account the wealth of the...