Varying Injurer Costs of Care, Negligence, and Self-Selection

Thomas Miceli

No 2003-11, Working papers from University of Connecticut, Department of Economics

Abstract: Standard economic models of negligence set a single standard of care to which all injurers must conform. When injurers differ in their costs of care, this leads to distortions in individual care choices. This paper derives the characteristics of a negligence rule that induces optimal care by all injurers by means of self-selection. The principal features of the rule are (1) the due standard is set at the optimal care of the lowest cost injurer, and (2) liability increases gradually rather than abruptly as care falls below this standard. The results are consistent with the gradation in liability under certain causation rules and under comparative negligence.

Pages: 20 pages
Date: 2003-03
New Economics Papers: this item is included in nep-hea
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2003-11

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