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Negligence, causation, and incentives for care

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  • Hylton, Keith N.
  • Lin, Haizhen

Abstract

We present a new model of negligence and causation and examine the influence of the negligence test, in the presence of intervening causation, on the level of care. In this model, the injurer's decision to take care reduces the likelihood of an accident only in the event that some nondeterministic intervention occurs. The effects of the negligence test depend on the information available to the court, and the manner in which the test is implemented. The key effect of the negligence test, in the presence of intervening causation, is to induce actors to take into account the distribution of the intervention probability as well as its expected value. In the most plausible scenario – where courts have limited information – the test generally leads to socially excessive care.

Suggested Citation

  • Hylton, Keith N. & Lin, Haizhen, 2013. "Negligence, causation, and incentives for care," International Review of Law and Economics, Elsevier, vol. 35(C), pages 80-89.
  • Handle: RePEc:eee:irlaec:v:35:y:2013:i:c:p:80-89
    DOI: 10.1016/j.irle.2013.04.004
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    References listed on IDEAS

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    1. Marks, Stephen, 1994. "Discontinuities, Causation, and Grady's Uncertainty Theorem," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 287-301, January.
    2. Shavell, Steven, 1985. "Uncertainty over Causation and the Determination of Civil Liability," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 587-609, October.
    3. Schweizer, Urs, 2006. "Legal Damages at Uncertain Causation," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 160, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    4. 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 427-447, June.
    5. Eberhard Feess & Gerd Muehlheusser & Ansgar Wohlschlegel, 2011. "Screening in Courts: On the Joint Use of Negligence and Causation Standards," Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(2), pages 350-375.
    6. Tabbach Avraham D., 2008. "Causation and Incentives to Choose Levels of Care and Activity Under the Negligence Rule," Review of Law & Economics, De Gruyter, vol. 4(1), pages 133-152, May.
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    Cited by:

    1. Keith N. Hylton & Haizhen Lin & Hyo-Youn Chu, 2013. "Negligence and Two-Sided Causation," Working Papers 2013-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    2. Keith Hylton & Haizhen Lin & Hyo-Youn Chu, 2015. "Negligence and two-sided causation," European Journal of Law and Economics, Springer, vol. 40(3), pages 393-411, December.

    More about this item

    Keywords

    Causation; Negligence; Optimal care; Proximate cause; Intervening cause; Precaution incentives; Durable precaution;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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