Economics Dictionary of ArgumentsHome
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| Compensation: In negligence law, compensation is the money that a court orders a negligent defendant to pay to an injured plaintiff. The purpose of compensation is to make the plaintiff whole, or to restore them to the position they were in before the negligence occurred. See also Tort law, Negligence. _____________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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Donald Wittman on Compensation - Dictionary of Arguments
Parisi I 430 Compensation/Wittman: The victim should be compensated for the additional prevention cost incurred by the victim and resulting damage when she mitigates optimally. The victim is compensated for this amount (here, the damage that occurred before the leaks were discovered and the cost of repacking after the leaks were discovered) whether or not the victim acted optimally. Of course, given this rule, the victim will have the appropriate incentive to act optimally because the cost of any inefficient response by the victim falls on the victim. So the breaching party is never liable for the damage that could have been mitigated under the doctrine of avoidable consequences. This rule is most important for its effect on the breaching party. It is true that we want the victim to mitigate damages optimally, but the victim would also mitigate damages if the victim received zero compensation or any other fixed amount independent of the victim’s behavior. What this mitigation of damage rule does is create the optimal incentive for the breaching party. >Contract law/Wittman, >Time/Wittman, >Incentive/Wittman. Parisi I 433 Damages/time/liabilityWittman: In nuisance law, when “damages” are awarded, they are typically for the costs of reasonable preventive behavior by the plaintiff and any damage occurring (or that would have occurred) after preventive action had been taken. In other words, there is marginal cost liability. >Marginal costs/Wittman. Donald Wittman. “Ex ante vs. ex post”. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University._____________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. |
Wittman, Donald Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
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