Pure Economic Loss
ENCYCLOPEDIA OF LAW AND ECONOMICS, 2nd edition, Volume 1, Tort Law and Economics, Michael Faure, ed.
16 Pages Posted: 26 Sep 2009
Date Written: September, 23 2009
This chapter surveys the literature on pure economic loss. It provides a taxonomy of cases that mingle under the label of pure economic loss, discusses the traditional explanations seeking to justify the frequent denial of compensation for pure economic loss and examines the transfer argument of Bishop and its critiques. It also studies the influence of market structure on the discrepancy between private loss and social loss, compares the efficiency properties of the rules of strict liability and negligence in the context of different pure economic loss rules and discusses the economic rationale for recovery in intentional tort cases. Finally, the various categories of pure economic loss cases (see the taxonomy) are analyzed from an economic perspective.
Keywords: Economic loss, financial loss, private and social loss, damage, compensation
JEL Classification: K13
Suggested Citation: Suggested Citation