Legal Liability When Individuals Have Moral Concerns

CIRPEE Working Paper 09-51

42 Pages Posted: 4 Dec 2009 Last revised: 21 Oct 2010

See all articles by Bruno Deffains

Bruno Deffains

Université Paris II - Panthéon-Assas; Institut Universitaire de France

Claude Fluet

Université Laval

Date Written: December 1, 2009

Abstract

We incorporate normative motivations into the economic model of accidents and tort rules. The social norm is that one should avoid harming others and should compensate if nevertheless harm is caused. To some extent, this is internalized through intrinsic moral concerns; moreover, those thought not to adhere to the norm are met with social disapproval. Moral and reputational concerns are not strong enough, however, for injurers to willingly compensate their victims. Absent legal liability, normative concerns induce precautions to prevent harm but precautions are then socially inefficient. By contrast, perfectly enforced legal liability crowds out informal incentives completely (e.g., individuals causing harm suffer no stigma) but precautions are then socially efficient. Under imperfectly enforced legal liability, formal legal sanctions and normative concerns are complements and interact to induce more precautions than under no-liability.

Keywords: Intrinsic motivations, social norms, esteem, strict liability, negligence, crowding out

JEL Classification: D8, K4, Z13

Suggested Citation

Deffains, Bruno and Fluet, Claude-Denys, Legal Liability When Individuals Have Moral Concerns (December 1, 2009). CIRPEE Working Paper 09-51. Available at SSRN: https://ssrn.com/abstract=1516337 or http://dx.doi.org/10.2139/ssrn.1516337

Bruno Deffains

Université Paris II - Panthéon-Assas ( email )

12 place du Pantheon
Paris cedex 05, 75005
France

Institut Universitaire de France ( email )

103, bld Saint-Michel
75005 Paris
France

Claude-Denys Fluet (Contact Author)

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada
1-418-656-2131, ext 3290 (Phone)

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