Additive and Non-Additive Risk Factors in Multiple Causation

C.J. van Velthoven Ben () and W. van Wijck Peter ()
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C.J. van Velthoven Ben: Leiden University, The Netherlands
W. van Wijck Peter: Leiden University, The Netherlands

Review of Law & Economics, 2009, vol. 5, issue 1, 517-539

Abstract: The law and economics literature on multiple causation generally distinguishes between causal uncertainty and joint causation. For cases of causal uncertainty it has been shown that proportional liability, a fractional share rule, may lead to socially optimal incentives for the level of care. However, for cases of joint causation fractional share rules tend to be inefficient. This paper argues that the crucial distinction is not so much between the uncertainty or jointness of the causal elements, but rather between the additivity or non-additivity of risk factors. We develop an approach that integrates causal uncertainty and joint causation. We show that an apportionment rule that assigns liability in proportion to the probability of causation always yields efficient incentives when the risk factors are additive. In non-additive cases the proportional rule has an efficient equilibrium outcome (and this equilibrium is unique for almost all parameter settings) when tortfeasors act independently and simultaneously. But it is not always efficient when tortfeasors act in concert or act sequentially. We apply our approach to four recent cases from English jurisprudence. These cases illustrate that both causal uncertainty and joint causation may involve additive as well as non-additive risks.

Date: 2009
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DOI: 10.2202/1555-5879.1340

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