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Laws and Norms: Experimental Evidence with Liability Rules

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  • Claude-Denys Fluet
  • Romain Espinosa
  • Bruno Deffains

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

  • Claude-Denys Fluet & Romain Espinosa & Bruno Deffains, 2017. "Laws and Norms: Experimental Evidence with Liability Rules," Cahiers de recherche 1705, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
  • Handle: RePEc:lvl:crrecr:1705
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    References listed on IDEAS

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    Keywords

    Behavioral law and economics; liability rules; Social norms; social preferences; legal norms;

    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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