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Rational Legal Decision-Making, Value Judgment and Efficient Precaution in Tort law

Mingli Zheng () and Sajid Anwar ()

Law and Economics from University Library of Munich, Germany

Abstract: By reinterpreting Savage axioms as axioms of the social rationality over resource allocations, we derive a social welfare function encompassing individual social values and a social attitude towards distributional inequality. Wealth maximization becomes the purpose of law only if individuals have equal social values and the society does not care about distributional inequality. In tort law, when the injurer is less socially valued than the victim, the society imposes a stricter due precaution level, and punitive damages will be awarded. Tort law also implicitly transfers wealth from the less socially valued party to the more socially valued party.

Keywords: rationality; value judgement; tort law; punitive damage (search for similar items in EconPapers)
JEL-codes: D70 K41 K49 (search for similar items in EconPapers)
Date: 2005-05-06
Note: Type of Document - pdf; pages: 28. forthcoming in JITE
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