Beyond Liability: Correcting Optimism Bias Through Tort Law

Queen's Law Journal, Vol. 35, No. 47, 2009

Minnesota Legal Studies Research Paper No. 10-10

24 Pages Posted: 19 Feb 2010 Last revised: 24 Feb 2010

See all articles by Barbara Luppi

Barbara Luppi

University of St. Thomas School of Law; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Date Written: February 19, 2010

Abstract

Due to their unrealistic optimism, people believe that risks are less likely to materialize for themselves than for others and hence inadequately react to legal threats and incentives such as tort liability. Optimism bias creates a distinctive problem in the design of tort rules, since it leads parties to assume excessive risks, in spite of the threat of liability, even when parties are provided accurate information about statistical facts. In this paper, we consider the opportunity to insulate the effects of optimism bias by exempting the parties from the liability due to optimism errors.

Keywords: Unrealistic Optimism, Debiasing, Tort Remedies, Exemption of Liability

JEL Classification: K13, K43, D03, D81

Suggested Citation

Luppi, Barbara and Parisi, Francesco, Beyond Liability: Correcting Optimism Bias Through Tort Law (February 19, 2010). Queen's Law Journal, Vol. 35, No. 47, 2009; Minnesota Legal Studies Research Paper No. 10-10. Available at SSRN: https://ssrn.com/abstract=1555793

Barbara Luppi

University of St. Thomas School of Law

2115 Summit Avenue
Saint Paul, MN 55105
United States

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics ( email )

Viale Berengario 51
41100 Modena, Modena 41100
Italy

Francesco Parisi (Contact Author)

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

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