Causation, Economic Efficiency and the Law of Torts

Ram Singh ()

No 102, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: In standard models dealing with liability rules, generally, the proportion of accident loss a party is required to bear does not depend upon the 'causation' - the extent to which the care or lack of care on the part of the party contributed to the loss. As a matter of legal doctrine, this specification of the liability rules is said to be incorrect. The efficiency analysis incorporating the causation requirement of law of Torts, whenever undertaken, is largely restricted only to the rule of negligence. One of the aims of this paper is to provide an efficiency characterization of the entire class of liability rules when the `causation' requirement of the law is taken into account. We demonstrate that the contradiction between causation doctrine of the law, on the one hand, and economic efficiency, on the other, is not as wide and intense as it is believed to be.

Keywords: Causation in law; liability rules; total social costs; efficient liability rules; causation-liability; Nash equilibrium. (search for similar items in EconPapers)
JEL-codes: K13 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2002-06
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (2)

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Working Paper: Causation, Economic Efficiency and the Law of Torts (2010)
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