Decoupled Liability and Efficiency: An Impossibility Theorem

Satish Jain

Review of Law & Economics, 2012, vol. 8, issue 3, 697-718

Abstract: A basic feature of tort law is that of coupled liability: the damages awarded to the victim equal the liability imposed on the injurer. This feature of tort law is incorporated in the very definition of a liability rule by postulating that the shares of loss borne by the two parties sum to one. In this paper the relationship between this feature of tort law and efficiency is investigated. It is shown that coupled liability is necessary for efficiency, i.e., if a rule is such that it invariably gives rise to efficient outcomes then it must be the case that under it the liability is coupled. In other words, no rule with decoupled liability can be such that it always yields efficient outcomes.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1515/1555-5879.1555 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:bpj:rlecon:v:8:y:2012:i:3:p:697-718:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rle/html

DOI: 10.1515/1555-5879.1555

Access Statistics for this article

Review of Law & Economics is currently edited by Francesco Parisi

More articles in Review of Law & Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().