The Economics of Tort Law: A Precis

Mattiacci, Giuseppe Dari; Parisi, Francesco

doi:10.2139/ssrn.458701

Cited by 6 publications

(1 citation statement)

References 48 publications

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“…are both internalized (Mattiacci, 2006; Mattiacci and Parisi, 2003; Rose‐Ackerman, 1994). Unfortunately, high transaction and information costs can get in the way of these goals and limit efficiency and effectiveness (CBO, 2004; Johnson et al, 1989; Kaplow and Shavell, 1999; Mattiacci and Parisi, 2003; Viscusi, 1989).…”

Section: Implications For Food Safetymentioning

confidence: 99%

Legal systems, institutional environment, and food safety

Brewster

Goldsmith

2007

Agricultural Economics

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In the aftermath of the recent food scares, the United States and the United Kingdom face major challenges to maintain a safe food system. Regulators on opposite sides of the Atlantic are facing rapid product and process innovations, changes in consumption behaviors, expansion of international trade, and discovery of new food hazards. The U.K. and the U.S. demonstrate different approaches to manage safety risks. This article will focus on two issues: the reasons behind the differences in the American and English policy approaches to food safety, and how these differences impact U.S. safety outcomes. A comparative legal framework is provided to understand how food safety is elicited in the economy and the incentive implications of the different institutional settings. These two different lenses, because they differ so, teach us about the fundamental sources of safety. The U.K.'s prevalent doctrine is parliamentary sovereignty and leads to a regulatory framework, while the U.S. is based on constitutional supremacy and relies on a legal framework. The source of safety under a regulatory framework is the government bureaucracy, while the U.S. legal framework provides an important point of departure-the constitutional standing of the firm and the consumer. We argue that while the U.K. system is structured to work through a regulatory framework to enhance the supply of safety in the economy, the U.S. system is much less directed. The legal system, the subject of this article, plays an important role not only in discouraging breach but also in acting as a check on the discretionary authority of the regulator. In the end, the U.S. and the U.K. may have equally safe food systems, but what differs is the fundamental source of the safety supply. The practical implication is that safety in the food system emerges from several sources, not just through regulation. Therefore, direct importation of U.K.-style regulatory approaches may not be effective within a U.S. constitutional setting. Copyright 2007 International Association of Agricultural Economists.

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Section: Implications For Food Safetymentioning

confidence: 99%

Legal systems, institutional environment, and food safety

Brewster

Goldsmith

2007

Agricultural Economics

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Equilibria Under Negligence Liability

Feldman

Singh

2021

Review of Law &Amp; Economics

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In many accident contexts, the expected accident harm depends on observable as well as unobservable dimensions of the precaution exercised by the parties involved. The observable dimensions are commonly referred to as the ‘care’ levels and the unobservable aspects as the ‘activity’ levels. In a seminal contribution, Shavell, S (1980). Strict liability versus negligence. J. Leg. Stud. 9: 1–25 extended the scope of the economic analysis of liability rules by providing a model that allows for the care as well as activity level choices. Subsequent works have used and extended Shavell’s model to predict outcomes under various liability rules, and also to compare their efficiency properties. These works make several claims about the existence and efficiency of equilibria under different liability rules, without providing any formal proof. In this paper, we re-examine the prevalent claims in the literature using the standard model itself. Contrary to these prevalent claims, we show that the standard negligence liability rules do not induce equilibrium for all of the accident contexts admissible under the model. Under the standard model, even the ‘no-fault’ rules can fail to induce a Nash equilibrium. In the absence of an equilibrium, it is not plausible to make a claim about the efficiency of a rule per-se or vis-a-vis other rules. We show that even with commonly used utility functions that meet all of the requirements of the standard model, the social welfare function may not have a maximum. In many other situations fully compatible with the standard model, a maximum of the social welfare function is not discoverable by the first order conditions. Under the standard model, even individually optimum choices might not exist. We analyze the underlying problems with the standard model and offer some insights for future research on this subject.

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Activity-Level Externalities and the Failure of Decoupling Liability

Baffi

2014

SSRN Journal

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The Economics of Tort Law: A Precis

Cited by 6 publications

References 48 publications

Legal systems, institutional environment, and food safety

Legal systems, institutional environment, and food safety

Equilibria Under Negligence Liability

Activity-Level Externalities and the Failure of Decoupling Liability

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