But-for Causation and the Implementability of Compensatory Damages Rules

Author:

Schweizer Urs1

Affiliation:

1. University of Bonn

Abstract

Abstract A damages rule is called compensatory if it requires compensation of each party who complied with the due care standard for harm caused by deficient precaution of the other party. The two main contributions of this article are as follows. First, we show that any Nash equilibrium of the game induced by a compensatory damages rule enhances welfare compared to the welfare that would have been attained if both parties had complied. This is true irrespective of whether the due care standards are set at their socially optimal level. Second, we provide a general result for evaluating the conditions under which courts have sufficient information to implement compensatory damages rules. This is the case when the available evidence allows courts to determine whether the injurer’s precaution choice was the but-for cause of any harm to the victim. The exact levels of precaution and harm need not be observable (JEL K13).

Publisher

Oxford University Press (OUP)

Subject

Law,Organizational Behavior and Human Resource Management,Economics and Econometrics

Reference16 articles.

1. “Re-Examining Liability Rules When Injurers as Well as Victims Suffer Losses,”;Arlen;International Review of Law and Economics,1990

2. “Toward an Economic Theory of Liability,”;Brown;Journal of Legal Studies,1973

3. “Lapses of Attention in Medical Malpractice and Road Accidents,”;Cooter;Theoretical Inquiries in Law,2014

4. “Deterrence and Uncertain Legal Standards,”;Craswell;Journal of Law, Economics, & Organization,1986

5. “On the Optimal Scope of Negligence,”;Dari-Mattiacci;Review of Law and Economics,2005

Cited by 2 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Damages for infringements of competition law;European Journal of Law and Economics;2022-04-08

2. Causation and the incentives of multiple injurers;International Review of Law and Economics;2021-12

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