Legal versus Normative Incentives under Judicial Error
AbstractWe analyze the complementarity between legal incentives (the threat of being held liable for damages) and normative incentives (the fear of social disapproval or stigma) in situations where instances of misbehavior are not perfectly observable. There may be multiple equilibria within a given legal regime, as well as multiple socio-legal equilibria. In particular, there are high stigma-high evidentiary standard regimes versus low stigma-low standard ones. We argue that this may explain some of the differences between common law and civil law regarding the notions of fault or negligence. Our analysis also provides an explanation for trends currently observed in civil-law systems, in particular the weakening of evidentiary requirements in tort cases.
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Bibliographic InfoPaper provided by CIRPEE in its series Cahiers de recherche with number 0718.
Date of creation: 2007
Date of revision:
Social interactions; socio-legal multiplier; stigma; judicial error; evidentiary standard;
Find related papers by JEL classification:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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