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Double-edged torts

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  • Luppi, Barbara
  • Parisi, Francesco
  • Pi, Daniel

Abstract

Many tort cases are characterized by two interrelated elements: “role uncertainty”, which occurs when individuals take precautions ignorant of their roles in future accidents and availability of “dual-effect precautions”, which reduce both the probability of an individual becoming an injurer and the probability that the same individual will become a victim of someone else's negligence. In this paper, we extend the traditional model to account for role-uncertainty and dual-effect precautions. We find that in these situations, the traditional formulation of Negligence fails to incentivize efficient precautions, inducing excessive role-specific precautions and insufficient dual-effect precautions. For such cases, we argue for a modification of the standard of due care that accounts for the full benefit of dual-effect precautions, in order to incentivize efficient precautionary efforts.

Suggested Citation

  • Luppi, Barbara & Parisi, Francesco & Pi, Daniel, 2016. "Double-edged torts," International Review of Law and Economics, Elsevier, vol. 46(C), pages 43-48.
    • Handle: RePEc:eee:irlaec:v:46:y:2016:i:c:p:43-48
    DOI: 10.1016/j.irle.2015.10.003
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    References listed on IDEAS

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    1. Epstein, Richard A, 1993. "Holdouts, Externalities, and the Single Owner: One More Salute to Ronald Coase," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 553-586, April.
    2. Kim, Jeonghyun & Feldman, Allan M., 2006. "Victim or injurer, small car or SUV: Tort liability rules under role-type uncertainty," International Review of Law and Economics, Elsevier, vol. 26(4), pages 455-477, December.
    3. Giuseppe Dari-Mattiacci & Bruno Lovat & Francesco Parisi, 2014. "Loss-Sharing between Nonnegligent Parties," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(4), pages 571-598, December.
    4. Dhammika Dharmapala & Sandra A. Hoffmann, 2005. "Bilateral Accidents with Intrinsically Interdependent Costs of Precaution," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 239-272, January.
    5. Peter A. Diamond, 1974. "Single Activity Accidents," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 107-164, January.
    6. Friehe Tim, 2007. "On the Similarity of Bilateral Harm and Unilateral Harm with Role-Type Uncertainty," Review of Law & Economics, De Gruyter, vol. 3(2), pages 553-580, December.
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    Cited by:

    1. Schaefer Hans-Bernd, 2020. "Laudatio: Francesco Parisi," Review of Law & Economics, De Gruyter, vol. 16(1), pages 1-9, March.
    2. Emanuela Carbonara & Alice Guerra & Francesco Parisi, 2016. "Sharing Residual Liability: The Cheapest Cost Avoider Revisited," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 173-201.
    3. Parisi Francesco, 2020. "Law and Economics as We Grow Younger," Review of Law & Economics, De Gruyter, vol. 16(1), pages 1-20, March.

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    More about this item

    Keywords

    Role-uncertainty; Dual-effect precautions; Precaution externalities; Restatement (Third) of Torts (2010) §3;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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