Precaution Incentives in Accident Settings

Tim Friehe

ISBN 10: 3834912921 / ISBN 13: 9783834912923

Published by Gabler Verlag, Gabler Verlag Sep 2008, 2008

About this Item

This item is printed on demand - Print on Demand Titel. Neuware -One central function of tort law is the inducement of precaution incentives. This is particularly welcome in settings in which the internalization of interdependencies between individuals relating to care and expected harm would otherwise not take effect due to high transaction costs broadly conceived, accident settings being a prime example.Tim Friehe analyzes important aspects for the design of tort law which intends to induce optimal individual choices and possible limitations of workable tort law in varied settings. Incentives to take precaution, which affect the accident probability and/or the magnitude of the harm in the event of an accident, are of primary interest in this context. After providing an extensive review of the literature relating to the economic analysis of tort law, the author goes on to discuss the consequences of victims with different harm levels. In particular, using average harm as a compensation measure in order to save administrative costs is considered and a scheme to make the revelation of the individual harm level incentive-compatible is devised. Furthermore, the book contributes to the ongoing discussion on the effects of judgment proofness and the distinction between unilateral harm and bilateral harm accidents. Finally, the author highlights the consequences of the consideration of hitherto neglected behavioral dimensions for the conclusions of the economic analysis of tort law.Gabler, Betriebswirt.-Vlg, Abraham-Lincoln-Str. 46, 65189 Wiesbaden 204 pp. Englisch.

Seller Inventory # 9783834912923

Bibliographic Details

• Title: Precaution Incentives in Accident Settings
• Publisher: Gabler Verlag, Gabler Verlag Sep 2008
• Publication Date: 2008
• Language: English
• ISBN 10: 3834912921
• ISBN 13: 9783834912923
• Binding: Taschenbuch
• Condition: Neu
• Dimensions: 210W x 148H x 12D millimeters 210 millimeters width by 148 millimeters height by 12 millimeters depth
• Weight: 271 grams

About this title

Synopsis

Law and economics has been established as an important sub-discipline of economics. Looking at the ?eld, it is undisputed that the economics of tort law has been the subject of much study early on and continues to be. The analysis in that realm is centered on the internalization of external e?ects by the means of liability law, i.e. the allocation of a liability burden possibly depending on the behavior of parties involved in an accident. In the by now standard framework, introduced by path-breaking contributions such as Calabresi (1970) and Brown (1973), the outcome with regard to care-taking (and possibly the level of activity) under several liability rules, which are actually observed in practice, is compared to what is socially desirable. The objective of society usually is assumed to be wealth maximization. The set of results which may be called the central theory show that liability rules can indeed induce ?rst-best behavior by parties, as long as several core assumptions hold. After the central theory of the economics of tort law had been settled, contributors to the literature started to test the robustness of the conclusions obtained when these core assumptions are varied. The existent literature on the economics of tort law is rich and diverse. Yet, without doubt, there are still numerous questions in the ?eld which need to be answered and therefore require scholarly attention. The present book rightfully goes along that path. In a collection of chapters, di?erent subjects are examined from a theoretical standpoint.

About the Author

Dr. Tim Friehe ist wissenschaftlicher Mitarbeiter von Prof. Dr. Laszlo Goerke in der Abteilung für Volkswirtschaftslehre, insbesondere Finanzwissenschaft der Universität Tübingen.