Liability Rules: An Economic Taxonomy
Amsterdam Law School Research Paper No. 2013-09
29 Pages Posted: 9 Feb 2013 Last revised: 13 Feb 2014
Date Written: February 7, 2013
The analysis of tort law is one of the most well-developed applications of economic methodology in the study of law. In this essay, we provide an overview of the economic approach to tort law, analyzing the effects of liability rules on care incentives. We catalogue a variety of possible tort regimes, systematically breaking down possible assignments of liability in terms of primary and secondary rules, and describe how their permutations distribute the costs of accidents (and the concomitant incentives to exercise precautionary care). We further consider what factual circumstances may render one tort regime preferable to another from the perspective of policymakers.
Keywords: economics of tort law, economics of accident law, taxonomy of tort law rules, literature of tort law and economics, tort liability
JEL Classification: K13
Suggested Citation: Suggested Citation