Rational Legal Decision-Making, Value Judgment, and Efficient Precaution in Tort Law

Mingli Zheng () and Sajid Anwar ()

Journal of Institutional and Theoretical Economics (JITE), 2005, vol. 161, issue 3, pages 411-

Abstract: By reinterpreting Savage's axioms as axioms of the social rationality over resource allocations, we derive a social welfare function encompassing individual social values and a social attitude towards distributional inequality. Wealth maximization becomes the purpose of law only if individuals have equal social values and the society does not care about distributional inequality. In tort law, when the injurer is less socially valued than the victim, the society imposes a stricter due-precaution level, and punitive damages will be awarded. Tort law also implicitly transfers wealth from the less socially valued party to the more socially valued party.

JEL-codes: D70 K41 K49 (search for similar items in EconPapers)
Date: 2005

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Working Paper: Rational Legal Decision-Making, Value Judgment and Efficient Precaution in Tort law (2005)
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