Legal Liability when Individuals Have Moral Concerns

Bruno Deffains and Claude Fluet

Cahiers de recherche from CIRPEE

Abstract: We incorporate normative motivations into the economic model of accidents and tort rules. The social norm is that one should avoid harming others and should compensate if nevertheless harm is caused. To some extent, this is internalized through intrinsic moral concerns; moreover, those thought not to adhere to the norm are met with social disapproval. Moral and reputational concerns are not strong enough, however, for injurers to willingly compensate their victims. Absent legal liability, normative concerns induce precautions to prevent harm but precautions are then socially inefficient. By contrast, perfectly enforced legal liability crowds out informal incentives completely (e.g., individuals causing harm suffer no stigma) but precautions are then socially efficient. Under imperfectly enforced legal liability, formal legal sanctions and normative concerns are complements and interact to induce more precautions than under no-liability.

Keywords: Intrinsic motivations; social norms; esteem; strict liability; negligence; crowding out (search for similar items in EconPapers)
JEL-codes: D8 K4 Z13 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-cbe, nep-law and nep-soc
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Citations: View citations in EconPapers (4)

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Journal Article: Legal Liability when Individuals Have Moral Concerns (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:0951

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