Beyond Liability: Correcting Optimism Bias Through Tort Law
Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics; University of St. Thomas School of Law
University of Minnesota - Law School; University of Bologna
February 19, 2010
Queen's Law Journal, Vol. 35, No. 47, 2009
Minnesota Legal Studies Research Paper No. 10-10
Due to their unrealistic optimism, people believe that risks are less likely to materialize for themselves than for others and hence inadequately react to legal threats and incentives such as tort liability. Optimism bias creates a distinctive problem in the design of tort rules, since it leads parties to assume excessive risks, in spite of the threat of liability, even when parties are provided accurate information about statistical facts. In this paper, we consider the opportunity to insulate the effects of optimism bias by exempting the parties from the liability due to optimism errors.
Number of Pages in PDF File: 24
Keywords: Unrealistic Optimism, Debiasing, Tort Remedies, Exemption of Liability
JEL Classification: K13, K43, D03, D81Accepted Paper Series
Date posted: February 19, 2010 ; Last revised: February 24, 2010
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