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Product Safety in the Age of AI: Autonomy, R&D, and Liability

Y Chen & Xinyu Hua

The Economic Journal2026https://doi.org/10.1093/ej/ueag036article
AJG 4ABDC A*
Weight
0.50

Abstract

We study optimal liability for AI-powered products. Like human users, artificial intelligence (AI) can cause product failures that harm third parties. Additionally, it may introduce extreme risks of large-scale harm that renders full liability impractical. Raising AI liability for ordinary loss above actual harm can decrease excessive autonomy and increase social welfare, even when it negatively impacts R&D efforts. A well-designed liability rule implements efficient levels of autonomy and balanced R&D that reduces AI’s general risk. However, under targeted R&D to reduce AI’s extreme risk, full efficiency cannot be achieved with liability, and regulations limiting such risk can perform better.

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https://doi.org/https://doi.org/10.1093/ej/ueag036

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@article{y2026,
  title        = {{Product Safety in the Age of AI: Autonomy, R&D, and Liability}},
  author       = {Y Chen & Xinyu Hua},
  journal      = {The Economic Journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1093/ej/ueag036},
}

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Product Safety in the Age of AI: Autonomy, R&D, and Liability

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.