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Rational Legal Decision-Making, Value Judgment and Efficient Precaution in Tort law

Author

Listed:
  • MINGLI ZHENG

    (University of Macau)

  • SAJID ANWAR

    (University of South Australia)

Abstract

By reinterpreting Savage axioms as axioms of the social rationality over resource allocations, we derive a social welfare function encompassing individual social values and a social attitude towards distributional inequality. Wealth maximization becomes the purpose of law only if individuals have equal social values and the society does not care about distributional inequality. In tort law, when the injurer is less socially valued than the victim, the society imposes a stricter due precaution level, and punitive damages will be awarded. Tort law also implicitly transfers wealth from the less socially valued party to the more socially valued party.

Suggested Citation

  • Mingli Zheng & Sajid Anwar, 2005. "Rational Legal Decision-Making, Value Judgment and Efficient Precaution in Tort law," Law and Economics 0505004, EconWPA.
  • Handle: RePEc:wpa:wuwple:0505004
    Note: Type of Document - pdf; pages: 28. forthcoming in JITE
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    References listed on IDEAS

    as
    1. Blackorby, Charles & Donaldson, David & Weymark, John A., 1999. "Harsanyi's social aggregation theorem for state-contingent alternatives1," Journal of Mathematical Economics, Elsevier, vol. 32(3), pages 365-387, November.
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    5. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309-309.
    6. Mongin Philippe, 1995. "Consistent Bayesian Aggregation," Journal of Economic Theory, Elsevier, vol. 66(2), pages 313-351, August.
    7. Gul, Faruk, 1992. "Savagés theorem with a finite number of states," Journal of Economic Theory, Elsevier, vol. 57(1), pages 99-110.
    8. Gilboa, Itzhak, 1987. "Expected utility with purely subjective non-additive probabilities," Journal of Mathematical Economics, Elsevier, vol. 16(1), pages 65-88, February.
    9. Philippe Mongin, 2002. "Is there progress in normative economics?," Chapters,in: Is There Progress in Economics?, chapter 10 Edward Elgar Publishing.
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    More about this item

    Keywords

    rationality; value judgement; tort law; punitive damage;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other

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