Question 71 wearing seat belts and shoulder harnesses

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QUESTION 7.1: Wearing seat belts and shoulder harnesses is an efficient means of minimizing the costs of automobile accidents. Assuming that the benefits of these passive restraints exceed their costs, but that not all drivers and passengers use seat belts, how might the rules of tort liability be changed so as to induce a greater number of people to wear seat belts and shoulder harnesses? (pp. 234-35) Three hypotheses might explain the limited use of seat belts. First, the decision to wear a seat belt is a utility- maximizing decisions made by fully informed, rationally self-interested economic actors. They wear seat belts up to the point at which the benefits exceed the costs but not beyond. So, whatever they do is optimal (assuming there are no external effects from the decision about whether to wear seat belts).
A third hypothesis holds that people misestimate the benefits from wearing seat belts because of an inability to make the relevant calculations, not because of a lack of information. People might be over-optimistic about their driving abilities and believe, as a result, that they do not need protection from automobile accident injuries. If so, then the solution might be mandatory safety measures, such as mandatory air bags. The alternative of allowing people to purchase seat belts or airbags only if their own private calculations indicate that they are cost-justified is not to be trusted to minimize the social costs of accidents. QUESTION 7.2: Are subrogation clauses efficient? Be sure to review your answer in light of the section below about litigation costs and their effect on the efficiency of the tort liability system.

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