baffi, enrico (2012): The Failure of Decoupling Liability and Other Mistakes in Tort Law.
In this paper I want to demonstrate that it is not possible, with traditional liability rules, to have one party that takes an efficient level of precaution. Both parties, whaever is the rule, take an excessive level of precaution. The problem is that, when we try to calculate the costs of an activity, we dconsider also the cost of precaution of the other party, but this is not usually done. Also the introduction of a tax (the solution called as "decoupling liability") does not solve the problem because the party who pays the tax does not consider the cost of precaution of the other party. This way of reasoning is instead wrog in unilateral accident where a party does not take precautions. In this case an efficient level of activity is reached. Due to these considerations some traditional conclusions about tort liabiity should be reconsidered
|Item Type:||MPRA Paper|
|Original Title:||The Failure of Decoupling Liability and Other Mistakes in Tort Law|
|Keywords:||The ineffciency of decoupling liability; the impossibility of a have a party to take an efficient level of precaution; some problems with Shavell Theorem|
|Subjects:||D - Microeconomics > D6 - Welfare Economics > D62 - Externalities
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General
K - Law and Economics > K1 - Basic Areas of Law > K13 - Tort Law and Product Liability
|Depositing User:||enrico Baffi|
|Date Deposited:||28. Oct 2012 03:49|
|Last Modified:||11. Feb 2013 12:59|
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