Find counter arguments by entering NameVs… or …VsName.
The author or concept searched is found in the following 1 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Marginal costs | Wittman | Parisi I 433 Marginal costs/liability/Wittman: In accident law, marginal cost civil liability is rare, but in contract law, it is the rule. There are several reasons for these two areas of law having different methods of determining liability: (1) In contract cases, the second party in the sequence (who can mitigate damages) always knows who created the initial wrong—the breacher of the contract. The same does not hold for accident cases. If a car swerved suddenly to avoid hitting another car driving in the other direction but on the wrong side of the road, it could be very difficult to discover afterward who the reckless driver was. (2) When a breach of contract occurs, cost-effective preventive action by the person who has the last clear chance may be very costly; for example, repacking the leaky pickle barrels. Therefore, it pays for the plaintiffs in breach of contract cases to sue even when there is “no damage” because sufficient marginal costs are involved in preventive action to make it worthwhile for the plaintiff to collect for these costs (which are also known as damages in the legal literature). In contrast, the amount of liability that any one driver could collect for swerving (and thereby avoiding an accident) would not be enough to compensate for the transaction cost of litigation. (3) It is much easier to determine sequence (who was first and who was last) in breach of contract than in accident cases. For all these reasons, we would expect the sequence of events to be much more important for breach of contract—where mitigation of damages is the rule—than for accidents where last clear chance is rarely applied. The differences in the two areas of civil law are thus due to the different costs of information and the benefits of litigation. >Compensation/Wittman, >Liability/Wittman. Parisi I 434 Rescue: If a person can be rescued at low cost, it is clearly economically efficient to do so. The Continental version of the Good Samaritan rule encourages low-cost rescues in two ways. First, the rescuer is compensated for the small costs of rescue; second, if the potential rescuer’s costs are somewhat higher than the average so that the reward does not fully cover all of the rescuer’s costs, then the threat of being liable for non-rescue will motivate the person to rescue. The rule also provides the appropriate incentives for those who might need rescue. By charging for the average cost of the rescue, the rescuee takes the appropriate level of care. A higher price for rescue would result in the potential rescuee being overly cautious and needing too few rescues. For example, consider the possibility of a person deciding to swim at a beach. Parisi I 435 The cost of rescue is not always trivial, and because of that, people are sometimes prevented from undertaking certain risky actions in the first place. 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. |
Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
| |||
No results. Please choose an author or concept or try a different keyword-search.