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Causation, Economic Efficiency and the Law of Torts


  • Ram Singh



In standard models dealing with liability rules, generally, the proportion of accident loss a party is required to bear does not depend upon the 'causation' - the extent to which the care or lack of care on the part of the party contributed to the loss. As a matter of legal doctrine, this specification of the liability rules is said to be incorrect. The efficiency analysis incorporating the causation requirement of law of Torts, whenever undertaken, is largely restricted only to the rule of negligence. One of the aims of this paper is to provide an efficiency characterization of the entire class of liability rules when the `causation' requirement of the law is taken into account. We demonstrate that the contradiction between causation doctrine of the law, on the one hand, and economic efficiency, on the other, is not as wide and intense as it is believed to be. [Working Paper No. 102]

Suggested Citation

  • Ram Singh, 2010. "Causation, Economic Efficiency and the Law of Torts," Working Papers id:2865, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:2865
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    References listed on IDEAS

    1. Kahan, Marcel, 1989. "Causation and Incentives to Take Care under the Negligence Rule," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 427-447, June.
    2. Peter A. Diamond, 1974. "Single Activity Accidents," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 107-164, January.
    3. Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
    4. Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
    5. A. Mitchell Polinsky, 1980. "Strict Liability versus Negligence in a Market Setting," NBER Working Papers 0420, National Bureau of Economic Research, Inc.
    6. Miceli, Thomas J., 1997. "Economics of the Law: Torts, Contracts, Property, Litigation," OUP Catalogue, Oxford University Press, number 9780195103908.
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    Cited by:

    1. Acciarri Hugo A. & Tohmé Fernando & Castellano Andrea, 2016. "Causal Apportionment of Tort Liability: An Efficient Approach," Review of Law & Economics, De Gruyter, vol. 12(1), pages 37-55, March.

    More about this item


    Causation in law; liability rules; total social costs; efficient liability rules; causation-liability; Nash equilibrium.;

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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