The Efficiency of Comparative Causation
25 Pages Posted: 6 Jul 2009
Date Written: July 1, 2009
Comparative causation is the only tort regime that allows parties to share an accident loss in equilibrium. The sharing of an accident loss between a nonnegligent injurer and his nonnegligent victim spreads activity level and R&D incentives between prospective tortfeasors and their victims. This is an effect that is never observed under the other negligence and strict liability based regimes. In spite of these interesting attributes, the existing literature left open the question as to whether loss sharing was able to maintain optimal care incentives for both parties. In this paper, we address this unresolved issue in the literature, considering the effciency of loss-sharing under comparative causation.
Keywords: torts, loss-sharing, negligence, strict liability, comparative causation
JEL Classification: K13, K32
Suggested Citation: Suggested Citation