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Variability in Punitive Damages: Empirically Assessing Exxon Shipping Co. v. Baker


  • Theodore Eisenberg
  • Michael Heise
  • Martin T. Wells


Exxon Shipping Co. v. Baker acknowledged that empirical studies undercut criticism of punitive damages. Paradoxically, the Court simultaneously expressed concern about jury predictability based on a high and variable punitive-compensatory ratio published in an article by the present authors. The Court reduced the $2.5 billion Exxon Valdez punitive award to $500 million and stated: ithe constitutional outer limit may well be 1:1. Our empirical findings do not support the unpredictability concern or widely applying the limiting ratio. The high and variable ratio is an artifact of not accounting for the key variable that explains punitive awards - the compensatory award.

Suggested Citation

  • Theodore Eisenberg & Michael Heise & Martin T. Wells, 2010. "Variability in Punitive Damages: Empirically Assessing Exxon Shipping Co. v. Baker," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(1), pages 5-26, March.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201003)166:1_5:vipdea_2.0.tx_2-x

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    Cited by:

    1. Christoph Engel & Urs Schweizer, 2010. "Jurimetrics 27th International Seminar on the New Institutional Economics June 11-13, 2009, Kloster Eberbach, Germany," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(1), pages 1-4, March.
    2. Kenworthey Bilz, 2010. "Defending the (Mis)use of Statistics in Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(1), pages 194-198, March.
    3. Stephen J. Choi & Theodore Eisenberg, 2010. "Punitive Damages in Securities Arbitration: An Empirical Study," The Journal of Legal Studies, University of Chicago Press, vol. 39(2), pages 497-546.

    More about this item

    JEL classification:

    • 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
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process


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