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
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)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:61:y:2020:i:c:s0144818819303473
Access Statistics for this article
International Review of Law and Economics is currently edited by C. Ott, A. W. Katz and H-B. SchÃ¤fer
More articles in International Review of Law and Economics from Elsevier
Bibliographic data for series maintained by Haili He ().