A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation

Steven Shavell ()

No 18418, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Regulation and the negligence rule are both designed to obtain compliance with desired standards of behavior, but they differ in a primary respect: compliance with regulation is ordinarily assessed independently of the occurrence of harm, whereas compliance with the negligence rule is evaluated only if harm occurs. It is shown in a stylized model that because the use of the negligence rule is triggered by harm, the rule enjoys an intrinsic enforcement cost advantage over regulation. Moreover, this advantage suggests that the examination of behavior under the negligence rule should tend to be more detailed than under regulation (as it is).

JEL-codes: K13 K20 L5 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-reg
Note: LE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Steven Shavell, 2013. "A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation," The Journal of Legal Studies, vol 42(2), pages 275-302.

Downloads: (external link)
http://www.nber.org/papers/w18418.pdf (application/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:nbr:nberwo:18418

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w18418

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().