Negative and positive externalities pose symmetrical problems to social welfare. The law internalizes negative externalities by providing general tort liability rules. According to such rules, those who cause harm to others should pay compensation. In theory, in the presence of positive externalities, negative liability should apply: those who produce benefits should be paid a compensatory award by the gainers. Nevertheless, the legal system does not display such general negative-liability rules. Rather, it tackles the problem of internalizing positive externalities by implementing a set of different and often indirect solutions. My explanation for this asymmetry in legal remedies rests on three features of a negative-liability regime, relating to intent, incentives, and evidence. These features explain the scope and design of restitution rules, liability for nonfeasance, and other mechanisms for the internalization of positive externalities. (c) 2009 by The University of Chicago. All rights reserved.
(This abstract was borrowed from another version of this item.)
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: P.O. Box 208245, New Haven, Connecticut 06520-8245|
Phone: (203) 432-7801
Fax: (203) 432-7225
Web page: http://www.amlecon.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Miceli, Thomas J., 1997. "Economics of the Law: Torts, Contracts, Property, Litigation," OUP Catalogue, Oxford University Press, number 9780195103908, December.
- Giuseppe Dari-Mattiacci, .
American Law & Economics Association Annual Meetings
1030, American Law & Economics Association.
- Gary S. Becker, 1974.
"Crime and Punishment: An Economic Approach,"
in: Essays in the Economics of Crime and Punishment, pages 1-54
National Bureau of Economic Research, Inc.
- A. Mitchell Polinsky & Steven Shavell, 1993. "Should Liability be Based on the Harm to the Victim or the Gain to the Injurer?," NBER Working Papers 4586, National Bureau of Economic Research, Inc.
- Goldberg, Victor P, 1994. "Recovery for Economic Loss following the Exxon Valdez Oil Spill," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 1-39, January.
- William M. Landes & Richard A. Posner, 1978. "Salvors, Finders, Good Samaritans and Other Rescuers: An Economic Study of Law and Altruism," NBER Working Papers 0227, National Bureau of Economic Research, Inc.
- Wittman, Donald, 1985. "Should compensation be based on costs or benefits?," International Review of Law and Economics, Elsevier, vol. 5(2), pages 173-185, December.
- A. Mitchell Polinsky & Yeon-Koo Che, 1991.
"Decoupling Liability: Optimal Incentives for Care and Litigation,"
NBER Working Papers
3634, National Bureau of Economic Research, Inc.
- A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 562-570, Winter.
- Mishan, E J, 1971. "The Postwar Literature on Externalities: An Interpretative Essay," Journal of Economic Literature, American Economic Association, vol. 9(1), pages 1-28, March.
- Craswell, Richard & Calfee, John E, 1986. "Deterrence and Uncertain Legal Standards," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 279-303, Fall.
- Donald Wittman, 1984. "Liability for Harm or Restitution for Benefit?," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 57-80, January.
- de Geest, Gerrit, 1992. "The provision of public goods in apartment buildings," International Review of Law and Economics, Elsevier, vol. 12(3), pages 299-315, September.
- P. A. Diamond, 1973.
"Single Activity Accidents,"
113, Massachusetts Institute of Technology (MIT), Department of Economics.
- Peter A. Diamond, 1974. "Accident Law and Resource Allocation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 366-405, Autumn.
- Bowles, Roger & Faure, Michael & Garoupa, Nuno, 2000. "Economic analysis of the removal of illegal gains," International Review of Law and Economics, Elsevier, vol. 20(4), pages 537-549, December.
When requesting a correction, please mention this item's handle: RePEc:bep:alecam:1030. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.