An Economic Model for Torts in Consumer Protection

Authors

  • Fernando Boarato Meneguin Senado Federal
  • Maurício Soares Bugarin Universidade de Brasília

DOI:

https://doi.org/10.18836/2178-0587/ealr.v3n2p189-205

Abstract

This article analyzes the effects of legislation and judicial decisions on tort liability in consumption relations. In consumer protection, if there is a failure to enforce penalties on producers, manufacturers may neglect proper care in preventing defects in products and services provided to society. After reviewing the Brazilian consumer protection legislation and literature, this paper presents an economic model, which shows that higher effective punishments induce producers to choose higher levels of precaution in the production process; however, higher punishments also reduce overall production. The trade-off between punishment, precaution and growth is an important element that should be taken into consideration in designing consumer’s protection public policy.

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Published

2012-12-10

Issue

Vol. 3 No. 2 (2012): VI Congresso Anual do IDERS

Section

Papers

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