Economics Dictionary of ArgumentsHome
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| Negligence: Negligence refers to the failure to exercise reasonable care, resulting in harm or injury to another person or property. It involves a breach of duty where a responsible party doesn't act reasonably or takes actions that a prudent person wouldn't in similar circumstances. See also compensation._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Thomas J. Miceli on Negligence - Dictionary of Arguments
Parisi I 14 Negligence law/Miceli: Negligence law often supplements the due standard for injurers with a corressponding standard for victims, referred to as contributory negligence (see Davies v. Mann, 11 East 60 (K.B. 1809). Under contributory negligence, failure of victims to meet the due standard of care prevents them from recovering damages regardless of the injurer's care level. The logic of this rule is the same as that for the Hand test (>Tort Law/Learned Hand), and it similarly creates a powerful incentive for victims to invest in effcient accident prevention. In terms of effciency, however, creation of a due standard for victims seems redundant since, as we have just seen, the "simple" negligence rule which only establishes a due standard for injurers is adequate to create effcient bilateral incentives. Vs: (...) see Landes and Posner (1987(1), p. 76), who offer an effciency argument for contributory negligence. >Tort Law/Learned Hand, cf. >Compensation/Cooter. Parisi I 15 Paradox of compensation: The problem is the requirement that any money that the injurer is required to pay in liability must be passed on to the victim as compensation, thus precluding so-called “decoupling” of liability and compensation.* >Tort law/Learned Hand. Solution: The brilliance of the negligence rule is that it resolves this paradox by establishing a standard of behavior that the injurer can meet to avoid liability, thereby giving the victim an incentive to invest in precaution so as to minimize her own damages. Brown: Beginning with Brown (1973)(3),** economists have formally shown that this approach works perfectly to create efficient bilateral incentives if the due care standard is set at the injurer’s cost-minimizing level of care, as described in the example above. Grady: Grady (1988(5), p. 16) identifies the key feature of negligence law that allows it to coordinate the behavior of injurers and victims in this way: “if each party is placed in a position where its conduct is judged on the assumption that the other side has taken appropriate precautions, then it would act in the socially appropriate manner.” Game theory: Game theory is the perfect methodology for formalizing this idea because it shows that efficient care by both injurers and victims, acting in ignorance ignorance of the other’s behavior, is the Nash equilibrium of a non-cooperative game under a properly designed negligence rule. Specifically, efficient care is the “best response” of each party under the presumption that the other party is also taking efficient care. What’s more, the law of negligence actually requires parties who find themselves in risky situations to hold such presumptions; that is, to assume that other parties with whom they may come in contact are taking ordinary care (Keeton et al., 1984(6), p. 240). * See, for example, Polinsky and Che (1991)(2). ** Also see Landes and Posner (1987)(1) and Shavell (1987)(4). 1. Landes, William and Richard Posner (1987). The Economic Structure of Tort Law. Cambridge, MA.: Harvard University Press. 2. Polinsky, A. Mitchell and Y. K. Che (1991). “Decoupling Liability: Optimal Incentives for Care and Litigation.” Rand Journal of Economics 22: 562–570. 3. Brown, John (1973). “Toward an Economic Theory of Liability.” Journal of Legal Studies 2: 323–349. 4. Shavell, Steven (1987). Economic Analysis of Accident Law. Cambridge, MA: Harvard University Press. 5. Grady, Mark (1988). “Common Law Control of Strategic Behavior: Railroad Sparks and the Farmer.” Journal of Legal Studies 17: 15–42. 6. Keeton, W. Page, D. Dobbs, R. Keeton, and D. Owen (1984). Prosser and Keeton on Torts. 5th edition. St. Paul, MN: West Publishing Co. Miceli, Thomas J. „Economic Models of Law“. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Miceli, Thomas J. Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
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