Tort Law and The Efficient Control of Externalities with Multiple Defendants

Ross McKitrick

Working Papers from University of Guelph, Department of Economics and Finance

Abstract: It has been widely argued that tort law can provide an effective decentralizes mechanism by which a socially optimal level of externality control can be achieved. I reconsider this argument in the very common situation in which there are multiple contributors to an incident of external damages, and the court assigns responsibility for damages based on each party's proportionate contribution to the externality. In this situation a strict liability law leads to short and long run efficiency only when the damage functioin is a straight line out of the origin.

Keywords: EXTERNALITIES; LAW; LIABILITY (search for similar items in EconPapers)
JEL-codes: D62 K13 K32 (search for similar items in EconPapers)
Pages: 10 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:gue:guelph:1998-1

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