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On Negligence Rules and Self-Selection

Author

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  • Thomas J. Miceli

    (University of Connecticut)

Abstract

Economic models of negligence ordinarily involve a single standard of care that all injurers must meet to avoid liability. When injurers differ in their costs of care, however, this leads to distortions in their care choices. This paper derives the characteristics of a generalized negligence rule that induces injurers to self-select their optimal care levels. The principal features of the rule are (1) the due standard of care is maximal, and (2) liability increases gradually as injurers depart further from this standard. The results are broadly consistent with the gradation in liability under certain causation rules and under comparative negligence.

Suggested Citation

  • Thomas J. Miceli, 2006. "On Negligence Rules and Self-Selection," Working papers 2006-26, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2006-26
    Note: I acknowledge the helpful comments of Francesco Parisi, Richard Posner, Steven Shavell, and two referees.
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    References listed on IDEAS

    as
    1. Russell Cooper, 1984. "On Allocative Distortions in Problems of Self-Selection," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 568-577, Winter.
    2. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, March.
    3. 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.
    4. Oren Bar-Gill & Omri Ben-Shahar, 2003. "The Uneasy Case for Comparative Negligence," American Law and Economics Review, Oxford University Press, vol. 5(2), pages 433-469, August.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Alfred Endres & Tim Friehe, 2012. "Market Power in the Eco-industry: Polluters’ Incentives under Environmental Liability Law," Land Economics, University of Wisconsin Press, vol. 88(1), pages 121-138.
    2. Alfred Endres & Tim Friehe & Bianca Rundshagen, 2015. "Environmental liability law and R&D subsidies: results on the screening of firms and the use of uniform policy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(4), pages 521-541, October.
    3. Baumann, Florian & Friehe, Tim, 2009. "On the superiority of damage averaging in the case of strict liability," International Review of Law and Economics, Elsevier, vol. 29(2), pages 138-142, June.
    4. Tim Friehe, 2007. "On the incentive effects of damage averaging in tort law," Economics Bulletin, AccessEcon, vol. 11(2), pages 1-7.
    5. Guerra, Alice & Hlobil, Tobias M., 2015. "Tailoring Negligence Standards to Accident Records," MPRA Paper 66281, University Library of Munich, Germany.
    6. repec:ebl:ecbull:v:11:y:2007:i:2:p:1-7 is not listed on IDEAS
    7. Alfred Endres & Tim Friehe, 2014. "The reasonable person standard: trading off static and dynamic efficiency," European Journal of Law and Economics, Springer, vol. 37(2), pages 249-267, April.
    8. Friehe, Tim, 2009. "Screening accident victims," International Review of Law and Economics, Elsevier, vol. 29(3), pages 272-280, September.

    More about this item

    Keywords

    Liability; negligence rules; self-selection;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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