Abstract
The Peltzman effect posits that implementing safety measures incentivizes agents to reduce their effort to a degree where these measures become counterproductive. This paper emphasizes the significance of including the agent’s type (skills, attributes) when analyzing the effectiveness of safety measures. Using data from iRacing, an online racing simulator, we find that the detection of the Peltzman effect is solely attributed to the omitted variable bias; specifically, the omission of a variable capturing the agent’s type. Additionally, our data demonstrates that enhancing types (increasing skills) leads to safety improvements.
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Articles in the same Issue
- Frontmatter
- Articles
- Trial Selection and Estimating Damages Equations
- On the Role of Sales Taxes for Efficient Compensation of Property Loss Under Strict Liability
- Broadband Internet and Crime
- Unraveling the Peltzman Effect: The Significance of Agent’s Type
- Reimagining Antitrust Institutions: A (Modest?) Proposal
- Legal Framework for the Protection of Entrepreneurs’ Rights
Articles in the same Issue
- Frontmatter
- Articles
- Trial Selection and Estimating Damages Equations
- On the Role of Sales Taxes for Efficient Compensation of Property Loss Under Strict Liability
- Broadband Internet and Crime
- Unraveling the Peltzman Effect: The Significance of Agent’s Type
- Reimagining Antitrust Institutions: A (Modest?) Proposal
- Legal Framework for the Protection of Entrepreneurs’ Rights