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Laws and Norms: Experimental Evidence with Liability Rules

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  • Bruno Deffains
  • Claude Denys Fluet
  • Romain Espinosa

Abstract

We conduct an experiment where participants choose between actions that provide private benefits but may also impose losses on strangers. Three legal environments are compared: no law, strict liability for the harm caused to others and an efficiently designed negligence rule where damages are paid only when the harmful action causes a net social loss. Legal obligations are either perfectly enforced (Severe Law) or only weakly so (Mild Law), i.e.,material incentives are then nondeterrent. We investigate how legal obligations and social norms interact. Our results show that liability rules strengthen pro-social behavior and suggest that strict liability has a greater effect than the negligence rule.

Suggested Citation

  • Bruno Deffains & Claude Denys Fluet & Romain Espinosa, 2017. "Laws and Norms: Experimental Evidence with Liability Rules," CIRANO Working Papers 2017s-13, CIRANO.
  • Handle: RePEc:cir:cirwor:2017s-13
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    3. Rostislav Staněk & Ondřej Krčál & Katarína Čellárová, 2021. "Pull yourself up by your bootstraps: Identifying procedural preferences against helping others in the presence of moral hazard," MUNI ECON Working Papers 2021-11, Masaryk University.
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    5. Christoph Rössler & Tim Friehe, 2020. "Liability, morality, and image concerns in product accidents with third parties," European Journal of Law and Economics, Springer, vol. 50(2), pages 295-312, October.
    6. Gianna Lotito & Matteo Migheli & Guido Ortona, 2020. "Transparency, asymmetric information and cooperation," European Journal of Law and Economics, Springer, vol. 50(2), pages 267-294, October.

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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