Efficient incentives from obligation law and the compensation principle

Urs Schweizer

International Review of Law and Economics, 2016, vol. 45, issue C, 54-62

Abstract: The compensation principle provides an analytical link between the requirement to compensate for deviations from legal or contractual obligations and the economic desideratum of rules providing efficient incentives. Quantifying damages suitably in line with the difference hypothesis, even relative to an inefficient obligation profile, would ensure the compensating goal being achieved as required for the compensation principle. The paper applies this insight to various settings from tort and contract law, leading to new results but also to a unifying perspective on findings from the existing literature.

Keywords: Legal obligation; Difference hypothesis; Compensation goal; Compensation principle; Efficient incentives; Efficient breach; Negligence rule; Liability in sequential choice; Hold-up problem (search for similar items in EconPapers)
JEL-codes: K12 K13 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S014481881500071X
Full text for ScienceDirect subscribers only

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:eee:irlaec:v:45:y:2016:i:c:p:54-62

DOI: 10.1016/j.irle.2015.11.005

Access Statistics for this article

International Review of Law and Economics is currently edited by C. Ott, A. W. Katz and H-B. Schäfer

More articles in International Review of Law and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().