Economic models of negligence ordinarily involve a single standard of care that all injurers must meet to avoid liability. When injurers differ in their costs of care, however, this leads to distortions in their care choices. This paper derives the characteristics of a generalized negligence rule that induces injurers to self-select their optimal care levels. The principal features of the rule are (1) the due standard of care is maximal, and (2) liability increases gradually as injurers depart further from this standard. The results are broadly consistent with the gradation in liability under certain causation rules and under comparative negligence.
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number
2006-26.
Length: 19 pages Date of creation: Apr 2006 Date of revision: Handle: RePEc:uct:uconnp:2006-26
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Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability
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