Students, retired judges, economists, and others made judgments of appropriate penalties and compen,sation for hypothetical injuries. In some scenarios, compensation was paid by the government and penalties were paid to the government, so the two could differ. Penalties were generally uninfluenced by their deterrent effect on future behavior. Penalties were greater when they were paid directly to the victim than when they were paid to the government. Compensation was affected by whether injuries were caused by people or by nature, or by acts vs, omissions. These effects are not justified according to consequentialist views of penalties and compensation. We suggest that people are overgeneralizing reasonable rules and that such overgeneralization may be involved in perverse effects of tort law.Key words: tort law, penalties, compensations, intuitive judgments When one person (or group) harms another, people often think that the injurer should compensate the victim. Tort law can compel compensation. Such a transaction not only compensates the victim but also punishes the injurer. When the injurer compensates the victim, as when a child is induced to give back something she has taken or when a victim sues an injurer in court, punishment and compensation are linked together. Sometimes these functions are separated. Criminals are punished whether or not their victims are compensated. Insurance (private and social) provides compensation for misfortunes regardless of whether they are caused by people or nature, and regardless of whether the insurer collects from the injurer.In the studies described here, we sought to understand how people think about punishment and compensation in the context of hypothetical cases in which people are killed or injured by birth-control pills or vaccines. These are typical situations in which lawsuits against companies occur. Some of our cases separated punishment and compensation, so that we could learn how people think about each function alone.