IDEAS home Printed from https://ideas.repec.org/a/ucp/jlstud/doi10.1086-673178.html
   My bibliography  Save this article

A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation

Author

Listed:
  • Steven Shavell

Abstract

Regulation and the negligence rule are both designed to obtain compliance with desired standards of behavior, but they differ in a primary respect: compliance with regulation is ordinarily assessed independently of the occurrence of harm, whereas compliance with the negligence rule is evaluated only if harm occurs. It is shown in a stylized model that because the use of the negligence rule is triggered by harm, the rule enjoys an intrinsic enforcement cost advantage over regulation. Moreover, this cost advantage suggests that the examination of behavior under the negligence rule should often be more detailed than under regulation--as it frequently is in fact.

Suggested Citation

  • Steven Shavell, 2013. "A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 42(2), pages 275-302.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/673178
    DOI: 10.1086/673178
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/673178
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/673178
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/673178?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kolstad, Charles D & Ulen, Thomas S & Johnson, Gary V, 1990. "Ex Post Liability for Harm vs. Ex Ante Safety Regulation: Substitutes or Complements?," American Economic Review, American Economic Association, vol. 80(4), pages 888-901, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Florian Baumann & Tim Friehe & Pascal Langenbach, 2020. "Fines versus Damages: Experimental Evidence on Care Investments," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2020_08, Max Planck Institute for Research on Collective Goods, revised Mar 2024.
    2. Massimo D’Antoni & Avraham D Tabbach, 2019. "The Complementary Role of Liability and Safety Regulation," American Law and Economics Review, American Law and Economics Association, vol. 21(1), pages 150-183.
    3. Maciej H. Kotowski & David A. Weisbach & Richard J. Zeckhauser, 2014. "Rules and Standards When Compliance Costs Are Private Information," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 297-329.
    4. Friehe, Tim & Tabbach, Avraham, 2018. "A comparison of simple action-based and outcome-based policies for emergency-like situations," Mathematical Social Sciences, Elsevier, vol. 92(C), pages 22-34.
    5. Dhammika Dharmapala & Nuno Garoupa & Richard H. McAdams, 2016. "Punitive Police? Agency Costs, Law Enforcement, and Criminal Procedure," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 105-141.
    6. Srivastava Astha & Srivastava Ankur, 2021. "Economic Analysis of Accident Law: A New Liability Rule that Induces Socially Optimal Behaviour in Case of Limited Information," Review of Law & Economics, De Gruyter, vol. 17(1), pages 119-131, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marion Desquilbet & Sylvaine Poret, 2014. "How do GM/non GM coexistence regulations affect markets and welfare?," European Journal of Law and Economics, Springer, vol. 37(1), pages 51-82, February.
    2. Zeeshan Noor Siddiqui, 2017. "Understanding the Linkage among Public Procurement (PP), Corruption, and Tax Morale (TM) Through Agency Theory (AT): A Review," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(3), pages 258-288, September.
    3. Gérard Mondello & Evens Salies, 2016. "Tort law under oligopolistic competition," SciencePo Working papers Main hal-03459225, HAL.
    4. E. Rouvière & K. Latouche, 2014. "Impact of liability rules on modes of coordination for food safety in supply chains," European Journal of Law and Economics, Springer, vol. 37(1), pages 111-130, February.
    5. Stephen F. Hamilton, 1998. "Taxation, Fines, and Producer Liability Rules: Efficiency and Market Structure Implications," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 140-150, July.
    6. Suurmond, Guido, 2007. "The effects of the enforcement strategy," MPRA Paper 21142, University Library of Munich, Germany.
    7. repec:hal:spmain:info:hdl:2441/5a1unjmoh881mrfbrlqhebkbba is not listed on IDEAS
    8. Friehe, Tim & Langlais, Eric, 2015. "On the political economy of public safety investments," International Review of Law and Economics, Elsevier, vol. 41(C), pages 7-16.
    9. Gérard Mondello & Evens Salies, 2018. "The unilateral accidenct model under a constrained Cournot-Nash duopoly," Working Papers hal-03458358, HAL.
    10. Joshua Schwartzstein & Andrei Shleifer, 2013. "An Activity-Generating Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 56(1), pages 1-38.
    11. Strömberg, Per, 2002. "The Mexican maquila industry and the environment: an overview of the issues," Estudios y Perspectivas – Sede Subregional de la CEPAL en México 4887, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. Ricardo Alonso & Odilon Câmara, 2024. "Organizing Data Analytics," Management Science, INFORMS, vol. 70(5), pages 3123-3143, May.
    13. Gérard Mondello, 2013. "Ambiguous Beliefs on Damages and Civil Liability Theories"," Post-Print halshs-00929948, HAL.
    14. Herbert Dawid & Gerd Muehlheusser, 2019. "Smart products: liability, timing of market introduction, and investments in product safety," CESifo Working Paper Series 7673, CESifo.
    15. Billette de Villemeur, Etienne & Leroux, Justin, 2019. "Tradable climate liabilities: A thought experiment," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    16. Zivin, Joshua Graff & Just, Richard E. & Zilberman, David, 2005. "Risk Aversion, Liability Rules, and Safety," International Review of Law and Economics, Elsevier, vol. 25(4), pages 604-623, December.
    17. Andrzej Baniak & Peter Grajzl, 2014. "Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation," CESifo Working Paper Series 5003, CESifo.
    18. Brousseau, Eric & Dedeurwaerdere, Tom & Jouvet, Pierre-Andre & Willinger, Marc (ed.), 2012. "Global Environmental Commons: Analytical and Political Challenges in Building Governance Mechanisms," OUP Catalogue, Oxford University Press, number 9780199656202, Decembrie.
    19. Ingo Vogelsang & Nishal Ramphal & Stephen Carroll & Nicholas Pace, 2007. "An economic analysis of consumer class actions in regulated industries," Journal of Regulatory Economics, Springer, vol. 32(1), pages 87-104, August.
    20. Gérard Mondello, 2022. "Strict liability, scarce generic input and duopoly competition," European Journal of Law and Economics, Springer, vol. 54(3), pages 369-404, December.
    21. Sébastien Pouliot & Daniel A. Sumner, 2008. "Traceability, Liability, and Incentives for Food Safety and Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 15-27.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlstud:doi:10.1086/673178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.