Decoupled Liability and Efficiency: An Impossibility Theorem
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Satish K. Jain
Abstract
A basic feature of tort law is that of coupled liability: the damages awarded to the victim equal the liability imposed on the injurer. This feature of tort law is incorporated in the very definition of a liability rule by postulating that the shares of loss borne by the two parties sum to one. In this paper the relationship between this feature of tort law and efficiency is investigated. It is shown that coupled liability is necessary for efficiency, i.e., if a rule is such that it invariably gives rise to efficient outcomes then it must be the case that under it the liability is coupled. In other words, no rule with decoupled liability can be such that it always yields efficient outcomes.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Artikel in diesem Heft
- Article
- Are Academics Messy? Testing the Broken Windows Theory with a Field Experiment in the Work Environment
- The Role of Prosecutor's Incentives in Creating Congestion in Criminal Courts
- Political Beliefs and Tort Awards: Evidence of Rationally Political Jurors from Two Data Sets
- Mitigating Judgment Proofness: Information Acquisition vs. Extended Liability
- Decoupled Liability and Efficiency: An Impossibility Theorem
- Natural Resource Production under Divided Ownership: Evidence from Coalbed Methane
- The Hyperbolic Punishment Function
- Patent Litigation and the Role of Enforcement Insurance
- Contractual Democracy
