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Legal versus Normative Incentives under Judicial Error

Bruno Deffains and Claude Fluet ()

Cahiers de recherche from CIRPEE

Abstract: We analyze the complementarity between legal incentives (the threat of being held liable for damages) and normative incentives (the fear of social disapproval or stigma) in situations where instances of misbehavior are not perfectly observable. There may be multiple equilibria within a given legal regime, as well as multiple socio-legal equilibria. In particular, there are high stigma-high evidentiary standard regimes versus low stigma-low standard ones. We argue that this may explain some of the differences between common law and civil law regarding the notions of fault or negligence. Our analysis also provides an explanation for trends currently observed in civil-law systems, in particular the weakening of evidentiary requirements in tort cases.

Keywords: Social interactions; socio-legal multiplier; stigma; judicial error; evidentiary standard (search for similar items in EconPapers)
JEL-codes: D8 K4 Z13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2007
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