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

Abstract

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

De Mot, Jef P. B., Pure Economic Loss (September, 23 2009). ENCYCLOPEDIA OF LAW AND ECONOMICS, 2nd edition, Volume 1, Tort Law and Economics, Michael Faure, ed.. Available at SSRN: https://ssrn.com/abstract=1477270

Jef P. B. De Mot (Contact Author)

Ghent University ( email )

Universiteitsstraat 4
Ghent, 9000
Belgium

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