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On the efficiency of the negligence rule


  • Satish Jain


The three versions of the negligence rule discussed in the literature differ regarding whether a negligent injurer is liable for the entire loss or only for the incremental loss; or regarding whether negligence is defined as failure to take at least due care or failure to take a cost-justified precaution. It is shown in the paper that the incremental version with untaken precaution notion of negligence is not efficient; not even for the unilateral case. The paper also establishes, for the bilateral case, the efficiency of the incremental version with the shortfall-from-due-care way of defining negligence.

Suggested Citation

  • Satish Jain, 2010. "On the efficiency of the negligence rule," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 13(4), pages 343-359.
  • Handle: RePEc:taf:jpolrf:v:13:y:2010:i:4:p:343-359
    DOI: 10.1080/17487870.2010.523972

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    Cited by:

    1. Jain Satish K., 2016. "Uncertainty Regarding Interpretation of the “Negligence Rule” and Its Implications for the Efficiency of Outcomes," Asian Journal of Law and Economics, De Gruyter, vol. 7(2), pages 147-168, August.


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