Unraveling the Peltzman Effect: The Significance of Agent’s Type-Reference-Cited by-同舟云学术

Unraveling the Peltzman Effect: The Significance of Agent’s Type

Published:2023-11-22 Issue:0 Volume:0 Page:
ISSN:2194-6000
Container-title:Review of Law & Economics
language:en
Short-container-title:

Author:

Grabiszewski Konrad¹,Horenstein Alex²^ORCID

Affiliation:

1. HEC Paris in Qatar , Doha , Qatar

2. Department of Economics , University of Miami , Coral Gables , USA

Abstract

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.

Publisher

Walter de Gruyter GmbH

Subject

Law,General Economics, Econometrics and Finance

Link

https://www.degruyter.com/document/doi/10.1515/rle-2023-0072/pdf

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