On the incentive effects of damage averaging in tort law
It has been generally accepted for unilateral-care models that care incentives are not affected by the use of either accurate damages or average damages if injurers lack knowledge of the precise damage level they might cause. This paper shows that in bilateral-care models with heterogeneous victims, consequences of averages as damage measure are critically dependent on the weighing of respective harm levels. Importantly, we establish that there is an average measure which allows the attainment of efficient care in the bilateral-care framework.
Volume (Year): 11 (2007)
Issue (Month): 2 ()
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References listed on IDEAS
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- Marceau, Nicolas & Mongrain, Steeve, 2003.
"Damage averaging and the formation of class action suits,"
International Review of Law and Economics,
Elsevier, vol. 23(1), pages 63-74, March.
- Nicolas Marceau & Steeve Mongrain, 2001. "Damage Averaging and the Formation of Class Action Suits," Cahiers de recherche CREFE / CREFE Working Papers 139, CREFE, Université du Québec à Montréal.
- Juan José Ganuza & Fernando Gómez, 2002. "Caution, children crossing: Heterogeneity of victim's cost of care and negligence rule," Economics Working Papers 666, Department of Economics and Business, Universitat Pompeu Fabra.
- Ram Singh, 2003. "Efficiency of 'Simple' Liability Rules When Courts Make Erroneous Estimation of the Damage," European Journal of Law and Economics, Springer, vol. 16(1), pages 39-58, July.
- Miceli Thomas J., 2006. "On Negligence Rules and Self-Selection," Review of Law & Economics, De Gruyter, vol. 2(3), pages 349-361, October.
- Thomas J. Miceli, 2006. "On Negligence Rules and Self-Selection," Working papers 2006-26, University of Connecticut, Department of Economics.
- Kaplow, Louis & Shavell, Steven, 1996. "Accuracy in the Assessment of Damages," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 191-210, April.
- Louis Kaplow & Steven Shavell, 1993. "Accuracy in the Assessment of Damages," NBER Working Papers 4287, National Bureau of Economic Research, Inc.
- Che, Yeon-Koo, 1996. "Equilibrium formation of class action suits," Journal of Public Economics, Elsevier, vol. 62(3), pages 339-361, November.
- Miceli, Thomas J., 1997. "Economics of the Law: Torts, Contracts, Property, Litigation," OUP Catalogue, Oxford University Press, number 9780195103908. Full references (including those not matched with items on IDEAS)
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