Comparing All-Or-Nothing and Proportionate Damages: A Rent Seeking Approach
This paper compares the all-or-nothing and proportionate damage rules for allocating damages in tort cases under evidentiary uncertainty. The focus is on how the two rules affect litigation expenditures by plaintiffs and defendants. The results of simulation experiments show that the expected judgment at trial is higher under the all-or-nothing rule for cases where the defendant did not take adequate care, but the judgment is higher under the proportionate rule when the defendant took more than adequate care. As for litigation expenditures, assuming equal costs of litigation, overall expenditures are higher under the all-or-nothing rule, except for very weak and very strong cases.
|Date of creation:||Oct 2014|
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- Levmore, Saul, 1990. "Probabilistic Recoveries, Restitution, and Recurring Wrongs," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 691-726, June.
- Shavell, Steven, 1985.
"Uncertainty over Causation and the Determination of Civil Liability,"
Journal of Law and Economics,
University of Chicago Press, vol. 28(3), pages 587-609, October.
- Steven Shavell, 1983. "Uncertainty Over Causation and the Determination of Civil Liability," NBER Working Papers 1219, National Bureau of Economic Research, Inc.
- George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
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