Negligence and Two-Sided Causation
23 Pages Posted: 29 Nov 2013 Last revised: 6 Apr 2015
Date Written: January 2015
We extend the economic analysis of negligence and intervening causation to “two-sided causation” scenarios. In the two-sided causation scenario the effectiveness of the injurer’s care depends on some intervention, and the risk of harm generated by the injurer’s failure to take care depends on some other intervention. We find that the distortion from socially optimal care is more severe in the two-sided causation scenario than in the one-sided causation scenario, and generally in the direction of excessive care. The practical lesson is that the likelihood that injurers will have optimal care incentives under the negligence test in the presence of intervening causal factors is low.
Keywords: negligence, causation, proximate cause, intervening causal factor, optimal care
JEL Classification: K00, K13
Suggested Citation: Suggested Citation