The (Hidden) Risk of Opportunistic Precautions

Ehud Guttel

Discussion Paper Series from The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem

Abstract: Under the conventional tort law paradigm, a tortfeasor behaves unreasonably when two conditions are met: the tortfeasor could have averted the harm by investing in cost-effective precautions and failed to do so, and other, more cost-effective precautions were not available to the victim. Torts scholarship has long argued that making such a tortfeasor responsible for the ensuing harm induces optimal care. This Article shows that by applying the conventional analysis, courts create incentives for opportunistic investments in prevention. In order to shift liability to others, parties might deliberately invest in precautions even where such investments are inefficient. The Article presents two possible solutions to the problem. By instituting a combination of (1) broader restitution rules and (2) an extended risk-utility standard, legislators and judges can reform tort law to discourage opportunistic precautions and maximize social welfare.

Pages: 48 pages
Date: 2007-10
New Economics Papers: this item is included in nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Virginia Law Review, 2007, vol. 93, pp. 1389-1435.

Downloads: (external link)
http://ratio.huji.ac.il/sites/default/files/publications/dp471.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://ratio.huji.ac.il/sites/default/files/publications/dp471.pdf [302 Moved Temporarily]--> https://ratio.huji.ac.il/sites/default/files/publications/dp471.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:huj:dispap:dp471

Access Statistics for this paper

More papers in Discussion Paper Series from The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem Contact information at EDIRC.
Bibliographic data for series maintained by Michael Simkin ().