The reasonable person standard: trading off static and dynamic efficiency
This paper compares the performance of a due care standard which is tailored to individual precaution costs to that of the reasonable person standard. This is done in a framework in which injurers can reduce their precaution costs via investment in progressing care technology. We show that the reasonable person standard may invoke better investment incentives, pointing to a potential trade-off between static and dynamic efficiency. Copyright Springer Science+Business Media, LLC 2014
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