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Causation and Incentives with Updating Courts

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  • Keith N. Hylton
  • Beixi Zhou

Abstract

This paper examines the negligence standard in the presence of intervening causal factors. The court observes the evidence and assigns a probability to the intervening factor in the course of evaluating the injurer's negligence. The court must, under the law, put a substantial weight on the facts in estimating the intervention probability. We allow the court to also put some weight on its own prior. Under such an adaptive approach to assessing negligence, incentives for care are affected by the court's inference process in addition to the usual factors. Courts can generate efficient incentives for care through the choice of prior.

Suggested Citation

  • Keith N. Hylton & Beixi Zhou, 2020. "Causation and Incentives with Updating Courts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 176(1), pages 123-146.
    • Handle: RePEc:mhr:jinste:urn:doi:10.1628/jite-2020-0015
    DOI: 10.1628/jite-2020-0015
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    More about this item

    Keywords

    causation; negligence; incentives for precaution; common law efficiency;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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