IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/38884.html
   My bibliography  Save this paper

The inefficiency of decoupling

Author

Listed:
  • baffi, enrico

Abstract

The scope of this paper is to demonstrate that only in case of unilateral accident a party will take efficient level of activity. In all cases of bilateral accidents there will be aòwaus a party that will take a too high level of activity. But the reason that I try to demonstrate in this work is not that one party does not consider the expected damage, but instead the also the party that has an interest to consider the expected damage will take a too high level of activity (i.e. even if the expected damage is part of her private costs). The reason why that happens is that, in case of strict liability for the injurer with a defence he will not take account of the precaution costs of the victim, and in any case of a regime of negligence the victim will not consider in her cost-benefit analysis the precaution costs of the injurer. The consequence of that is a level of activity which is inefficient for a different reason with respect to that well known: that is the fact that a party does not bear the expected damage. I accept this known solution but I underpin another problem. The conclusion is that also decoupling does not produce an efficient consequence and that the search of tort efficient rules is still more difficult.

Suggested Citation

  • baffi, enrico, 2012. "The inefficiency of decoupling," MPRA Paper 38884, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38884
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/38884/1/MPRA_paper_38884.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/39536/1/MPRA_paper_39536.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Inefficient Decoupling; excessive activity Level; Precuatoray Externalities: Pigouvian Tax;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • K19 - Law and Economics - - Basic Areas of Law - - - Other
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:38884. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.