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Learning Liability Rules

Author

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  • Wittman, Donald
  • Friedman, Daniel
  • Crevier, Stephanie
  • Braskin, Aaron

Abstract

We conduct experiments regarding the equilibrium and convergence properties of three different liability rules: negligence with contributory negligence, comparative negligence, and no-fault. Our experimental results show that, in comparison to contributory negligence, comparative negligence promotes a faster and more reliable convergence to the efficient equilibrium. Furthermore, as predicted by theory, the no-fault equilibrium yields suboptimal amounts of effort. Along the way we also test varioius hypotheses regarding learning and other adjustment dynamics. Thus our article extends the traditional static notion of institutional choice-liability rules with efficient equilibria are chosen-to a more dynamic perspective-rules that rapidly achieve efficient equilibria are chosen. Coauthors are Daniel Friedman, Stephanie Crevier, and Aaron Braskin. Copyright 1997 by the University of Chicago.

Suggested Citation

  • Wittman, Donald & Friedman, Daniel & Crevier, Stephanie & Braskin, Aaron, 1997. "Learning Liability Rules," The Journal of Legal Studies, University of Chicago Press, vol. 26(1), pages 145-164, January.
    • Handle: RePEc:ucp:jlstud:v:26:y:1997:i:1:p:145-64
    DOI: 10.1086/467991
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    Cited by:

    1. Vera Angelova & Olivier Armantier & Giuseppe Attanasi & Yolande Hiriart, 2014. "Relative performance of liability rules: experimental evidence," Theory and Decision, Springer, vol. 77(4), pages 531-556, December.
    2. Mingli Zheng, 2001. "Liability Rules and Evolutionary Dynamics," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(4), pages 520-535, December.
    3. Dopuch, Nicholas & Ingberman, Daniel E. & King, Ronald R., 1997. "An experimental investigation of multi-defendant bargaining in 'joint and several' and proportionate liability regimes," Journal of Accounting and Economics, Elsevier, vol. 23(2), pages 189-221, July.
    4. 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.
    5. Allan M. Feldman & Jeonghyun Kim, 2003. "Victim or Injurer:Negligence-Based Liability Rules Under Role-Type Uncertainty, With An Extension to Collisions Of Different-Sized Vehicles," Working Papers 2003-17, Brown University, Department of Economics.
    6. Serge Garcia & Julien Jacob & Eve-Angéline Lambert, 2017. "Comparison of liability sharing rules for environmental damage: An experiment with different levels of solvency," Working Papers of BETA 2017-12, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    7. 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.
    8. Giuseppe Attanasi & Laura Concina & Caroline Kamaté & Valentina Rotondi, 2020. "Firm’s protection against disasters: are investment and insurance substitutes or complements?," Theory and Decision, Springer, vol. 88(1), pages 121-151, February.
    9. Ronald R. King & Rachel Schwartz, 1999. "Legal Penalties and Audit Quality: An Experimental Investigation," Contemporary Accounting Research, John Wiley & Sons, vol. 16(4), pages 685-710, December.
    10. Theodore Eisenberg & Christoph Engel, 2016. "Unpacking Negligence Liability: Experimentally Testing the Governance Effect," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 13(1), pages 116-152, March.

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