Causation and Incentives to Choose Levels of Care and Activity Under the Negligence Rule
-
Avraham D. Tabbach
Standard economic analysis of tort law shows that the causation requirement does not affect the operation of the negligence rule in a perfect world, but does so in an imperfect world. While the standard analysis has focused exclusively on care models, this paper analyzes the impact of the causation requirement in more realistic models of care and activity. This paper shows that in these settings the causation requirement is still of no consequence in a perfectly operating world; however, under imperfect conditions, the qualitative impact of the causation requirement depends on the type of the precautionary measure and its relationship to the activity level. If care and expected harm are linear in activity levels, then causation alters the basic results. For example, it is shown that if due care is set at incorrect levels (a reasonable person rather than an individualized standard), then causation is not necessarily socially desirable; and that it is socially detrimental under conditions of systematically mis-estimated harm. On the other hand, if the precautionary measure is perfectly durable – i.e., its costs are independent of the activity level – then the basic qualitative results are not changed. For example, setting due care slightly higher than first-best optimal care induces injurers to abide by the due care standard. In addition, slight errors in estimating damages do not affect injurers’ adherence to the due care standard.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Artikel in diesem Heft
- Article
- Paying the Price for Being Caught: The Economics of Manifest and Non-Manifest Theft in Roman Law
- Measuring Skill in Games with Random Payoffs: Evaluating Legality
- Timing of Crime, Learning and Sanction
- Controlling Avoidance: Ex Ante Regulation Versus Ex Post Punishment
- Damages for Breach of Contract, Impossibility of Performance and Legal Enforceability
- Social Norms, Self-Interest and Ambiguity of Legal Norms: An Experimental Analysis of the Rule vs. Standard Dilemma
- Frischmann's View of "Toward a Theory of Property Rights"
- Causation and Incentives to Choose Levels of Care and Activity Under the Negligence Rule
- A Positive Theory of Strict Liability
- Theory Meets Practice: Barriers to Entry in Merger Analysis
- Expert Testimony, Daubert, and the Determination of Damages
- Split-Estate Negotiations: The Case of Coal-Bed Methane
- Attorneys' Compensation in Litigation with Bilateral Delegation
- The Paradox of Expected Punishment: Legal and Economic Factors Determining Success and Failure in the Fight against Organized Crime
- The Biasing Effects of Memory Distortions on the Process of Legal Decision-Making
- Transaction Costs, Neighborhood Effects, and the Diffusion of the Uniform Sales Act, 1906-47
- A Note on the Social versus Private Value of Suits when Care is Bilateral
- The Hidden Bias of the Vienna Convention on the International Law of Treaties
- Differential Victimization: Efficiency and Fairness Justifications for the Felony Murder Rule
- Underpricing of IPOs and Legal Frameworks Around the World
- Damages or Reinstatement: Incentives and Remedies for Unjust Dismissal
- Jury Verdicts in Drunken Driving Cases
- The Market for Lawyers and Social Capital: Are Informal Rules a Substitute for Formal Ones?
- Competition and Unitization in Oil Extraction: A Tale of Two Tragedies
Artikel in diesem Heft
- Article
- Paying the Price for Being Caught: The Economics of Manifest and Non-Manifest Theft in Roman Law
- Measuring Skill in Games with Random Payoffs: Evaluating Legality
- Timing of Crime, Learning and Sanction
- Controlling Avoidance: Ex Ante Regulation Versus Ex Post Punishment
- Damages for Breach of Contract, Impossibility of Performance and Legal Enforceability
- Social Norms, Self-Interest and Ambiguity of Legal Norms: An Experimental Analysis of the Rule vs. Standard Dilemma
- Frischmann's View of "Toward a Theory of Property Rights"
- Causation and Incentives to Choose Levels of Care and Activity Under the Negligence Rule
- A Positive Theory of Strict Liability
- Theory Meets Practice: Barriers to Entry in Merger Analysis
- Expert Testimony, Daubert, and the Determination of Damages
- Split-Estate Negotiations: The Case of Coal-Bed Methane
- Attorneys' Compensation in Litigation with Bilateral Delegation
- The Paradox of Expected Punishment: Legal and Economic Factors Determining Success and Failure in the Fight against Organized Crime
- The Biasing Effects of Memory Distortions on the Process of Legal Decision-Making
- Transaction Costs, Neighborhood Effects, and the Diffusion of the Uniform Sales Act, 1906-47
- A Note on the Social versus Private Value of Suits when Care is Bilateral
- The Hidden Bias of the Vienna Convention on the International Law of Treaties
- Differential Victimization: Efficiency and Fairness Justifications for the Felony Murder Rule
- Underpricing of IPOs and Legal Frameworks Around the World
- Damages or Reinstatement: Incentives and Remedies for Unjust Dismissal
- Jury Verdicts in Drunken Driving Cases
- The Market for Lawyers and Social Capital: Are Informal Rules a Substitute for Formal Ones?
- Competition and Unitization in Oil Extraction: A Tale of Two Tragedies
