The Efficiency of Comparative Causation
Under a rule of comparative causation, an accident loss is shared between a victim and a tortfeasor when the parties are either both negligent (as with comparative negligence) or when they are both non-negligent. When one or the other party is found solely negligent, the negligent party bears the entire accident loss. Comparative causation is the only tort regime that allows sharing of an accident loss between a non-negligent injurer and his non-negligent victim. By allowing the sharing of an accident loss in equilibrium, the comparative causation rule has efficiency and risk-allocation properties that are never observed under conventional negligence or strict liability regimes. With respect to efficiency, the comparative causation rule spreads activity level and R&D incentives between the parties, rather than concentrating them on one or the other party (the residual bearer). With respect to the allocation of risk, comparative causation avoids the all-or-nothing allocations of the residual loss that we observe under other legal rules. In doing so, comparative causation provides a mechanism of mutual insurance of victim and tortfeasor with a more equitable apportionment of the residual loss. In spite of these interesting attributes, the existing literature still falls short of establishing the compatibility of comparative causation with efficiency. In this paper, we show that loss sharing can be achieved while preserving optimal care incentives for both parties.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 6 (2010)
Issue (Month): 2 (September)
|Contact details of provider:|| Web page: http://www.degruyter.com|
|Order Information:||Web: http://www.degruyter.com/view/j/rle|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chung, T.Y., 1992.
"Efficiency of Comparative Negligence: A Game Theoretic Analysis,"
UWO Department of Economics Working Papers
9215, University of Western Ontario, Department of Economics.
- Chung, Tai-Yeong, 1993. "Efficiency of Comparative Negligence: A Game Theoretic Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 22(2), pages 395-404, June.
- Oren Bar-Gill & Omri Ben-Shahar, 2003. "The Uneasy Case for Comparative Negligence," American Law and Economics Review, Oxford University Press, vol. 5(2), pages 433-469, August.
- Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
- Paul Burrows, 1999. "A Deferential Role for Efficiency Theory in Analysing Causation-Based Tort Law," European Journal of Law and Economics, Springer, vol. 8(1), pages 29-49, July.
- Allan M Feldman & Ram Singh, 2008.
2008-9, Brown University, Department of Economics.
- Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
- A. Mitchell Polinsky & Yeon-Koo Che, 1991.
"Decoupling Liability: Optimal Incentives for Care and Litigation,"
RAND Journal of Economics,
The RAND Corporation, vol. 22(4), pages 562-570, Winter.
- A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," NBER Working Papers 3634, National Bureau of Economic Research, Inc.
- Ram Singh, 2006.
"On the Existence and Efficiency of Equilibria under Liability Rules,"
150, Centre for Development Economics, Delhi School of Economics.
- Ram Singh, 2008. "On The Existence and Efficiency of Equilibria Under Liability Rules," Working Papers id:1716, eSocialSciences.
- Ram Singh, 2006. "On the Existence and Efficiency of Equilibria Under Liability Rules," NBER Working Papers 12625, National Bureau of Economic Research, Inc.
- Yu-Ping Liao & Michelle J. White, 2002. "No-Fault for Motor Vehicles: An Economic Analysis," American Law and Economics Review, Oxford University Press, vol. 4(2), pages 258-294.
- Singh Ram, 2007. "Comparative Causation and Economic Efficiency: When Activity Levels are Constant," Review of Law & Economics, De Gruyter, vol. 3(2), pages 383-406, December.
- Kahan, Marcel, 1989. "Causation and Incentives to Take Care under the Negligence Rule," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 427-47, June.
- Rea, Samuel Jr., 1987. "The economics of comparative negligence," International Review of Law and Economics, Elsevier, vol. 7(2), pages 149-162, December.
- Lando, Henrik, 1997. "An attempt to incorporate fairness into an economic model of tort law," International Review of Law and Economics, Elsevier, vol. 17(4), pages 575-587, December.
- Peter Van Wijck & Jan Winters, 2001. "The Principle of Full Compensation in Tort Law," European Journal of Law and Economics, Springer, vol. 11(3), pages 319-332, May.
- Hylton, Keith N., 2002. "An asymmetric-information model of litigation," International Review of Law and Economics, Elsevier, vol. 22(2), pages 153-175, August.
- David Kaye & Mikel Aickin, 1984. "A Comment on Causal Apportionment," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 191-208, January.
- Aaron S. Edlin., 1993.
"Efficient Standards of Due Care: Should Courts Find More Parties Negligent Under Comparative Negligence?,"
Economics Working Papers
93-218, University of California at Berkeley.
- Edlin, Aaron S., 1994. "Efficient standards of due care: Should courts find more parties negligent under comparative negligence?," International Review of Law and Economics, Elsevier, vol. 14(1), pages 21-34, March.
- Miceli, Thomas J., 1997. "Economics of the Law: Torts, Contracts, Property, Litigation," OUP Catalogue, Oxford University Press, number 9780195103908, December.
When requesting a correction, please mention this item's handle: RePEc:bpj:rlecon:v:6:y:2010:i:2:n:5. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.