Incentives to take care under contributory and comparative fault: The role of strategic complementarity

Benjamin G. Ogden and Keith N. Hylton

International Review of Law and Economics, 2020, vol. 61, issue C

Abstract: Previous literature on contributory versus comparative negligence has shown that they reach equivalent equilibria. These results, however, depend upon an insufficiently granular model of strategic incentives under the Hand Formula that ignores courts’ information constraints. Taking information constraints into account, we identify a set of cases where care by one agent significantly increases the benefits of care by the other. When such cases obtain under bilateral harm, comparative negligence generates greater incentives for care, but this additional care occurs only when it is not socially optimal (i.e., “defensive care”). By contrast, under unilateral harm or asymmetric costs of care, contributory negligence creates socially excessive care. Therefore, it is possible to socially rank negligence regimes depending upon the symmetry of potential harm and costs of care. We discuss optimal choice of rules in light of these results.

Keywords: Comparative negligence; Contributory negligence; Fault regimes; Hand Formula; Negligence; Optimal care; Strategic complementarity (search for similar items in EconPapers)
JEL-codes: K13 K4 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0144818819303473
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:61:y:2020:i:c:s0144818819303473

DOI: 10.1016/j.irle.2019.105882

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 ().