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Negligence, Causation and Incentive for Care

  • Keith N. Hylton

    (Boston University Law School)

  • Haizhen Lin

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

We present a new model of negligence and causation and examine the influence of the negligence test, in the presence of intervening causation, on the level of care. In this model, the injurer’s decision to take care reduces the likelihood of an accident only in the event that some nondeterministic intervention occurs. The effects of the negligence test depend on the information available to the court, and the manner in which the test is implemented. The key effect of the negligence test, in the presence of intervening causation, is to induce actors to take into account the distribution of the intervention probability as well as its expected value. In the most plausible scenario – where courts have limited information – the test generally leads to socially excessive care.

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File URL: http://kelley.iu.edu/riharbau/RePEc/iuk/wpaper/bepp2013-07-hylton-lin.pdf
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Paper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2013-07.

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Date of creation: Jul 2013
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Handle: RePEc:iuk:wpaper:2013-07
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  1. Schweizer, Urs, 2006. "Legal Damages at Uncertain Causation," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 160, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Marks, Stephen, 1994. "Discontinuities, Causation, and Grady's Uncertainty Theorem," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 287-301, January.
  3. Eberhard Feess & Gerd Muehlheusser & Ansgar Wohlschlegel, 2011. "Screening in Courts: On the Joint Use of Negligence and Causation Standards," Journal of Law, Economics and Organization, Oxford University Press, vol. 27(2), pages 350-375.
  4. Tabbach Avraham D., 2008. "Causation and Incentives to Choose Levels of Care and Activity Under the Negligence Rule," Review of Law & Economics, De Gruyter, vol. 4(1), pages 133-152, May.
  5. 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 427-47, June.
  6. Steven Shavell, 1983. "Uncertainty Over Causation and the Determination of Civil Liability," NBER Working Papers 1219, National Bureau of Economic Research, Inc.
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