Abstract

http://ssrn.com/abstract=560062
 
 

References (60)



 
 

Citations (2)



 


 



Least Cost Avoidance: The Tragedy of Common Safety


Giuseppe Dari-Mattiacci


University of Amsterdam - Amsterdam Center for Law and Economics (ACLE); Tinbergen Institute

Nuno M. Garoupa


University of Illinois College of Law


Journal of Law, Economics, and Organization, Forthcoming
George Mason Law & Economics Research Paper No. 04-27

Abstract:     
This paper shows that the least cost avoider approach in tort is not necessarily the optimal way to attain least cost avoidance when accidents can be avoided by either of two parties. When parties do not observe each other's costs of care at the time of the accident and are unable to determine which party is the least cost avoider, they fail to anticipate the outcome of the adjudication. Under these circumstances, accident avoidance becomes a commons problem because care by each individual party reduces the prospect of liability for both parties. As a result parties suboptimally invest in care. We show that regulation removes this problem and is superior to tort liability both when parties act simultaneously and when they act sequentially. We further examine how different liability rules perform in this respect.

Number of Pages in PDF File: 42

Keywords: tort, fine, precaution cost liability, last clear chance, least cost avoider

JEL Classification: K13, K32

Accepted Paper Series





Download This Paper

Date posted: June 29, 2004 ; Last revised: April 7, 2011

Suggested Citation

Dari-Mattiacci, Giuseppe and Garoupa, Nuno M., Least Cost Avoidance: The Tragedy of Common Safety. Journal of Law, Economics, and Organization, Forthcoming; George Mason Law & Economics Research Paper No. 04-27. Available at SSRN: http://ssrn.com/abstract=560062 or http://dx.doi.org/10.2139/ssrn.560062

Contact Information

Giuseppe Dari-Mattiacci (Contact Author)
University of Amsterdam - Amsterdam Center for Law and Economics (ACLE) ( email )
Roeterstraat 11
Amsterdam, 1018WB
Netherlands
HOME PAGE: http://darimattiacci.acle.nl
Tinbergen Institute
Roetersstraat 31
Amsterdam, 1018 WB
Netherlands
HOME PAGE: http://scholar.google.com/citations?user=AuUfjxUAAAAJ&hl=en
Nuno M. Garoupa
University of Illinois College of Law ( email )
504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
HOME PAGE: http://works.bepress.com/nunogaroupa/
Feedback to SSRN


Paper statistics
Abstract Views: 2,055
Downloads: 259
Download Rank: 68,218
References:  60
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.297 seconds