Incentives to Take Care Under Contributory and Comparative Fault

23 Pages Posted: 15 Feb 2015 Last revised: 10 May 2016

See all articles by Benjamin Ogden

Benjamin Ogden

Texas A&M University, Department of Political Science

Keith N. Hylton

Boston University - School of Law

Date Written: April 20, 2016

Abstract

Previous literature on contributory versus comparative negligence has shown that they reach equivalent equilibria. These results, however, depend upon a stylized application of the Hand Formula and an insufficiently coarse model of strategic incentives. Taking this into account, we identify a set of cases where care by one agent significantly increases the benefits of care by the other. When such cases obtain under bilateral harm, comparative negligence generates greater incentives for care, but this additional care occurs only when care is not socially optimal. By contrast, under unilateral harm or asymmetric costs of care, contributory negligence creates socially excessive care. Therefore, it is possible to socially rank negligence regimes depending upon the symmetry of potential harm and costs of care. We discuss a potential reform, the Retrospective Negligence Test, that when applied in the case of bilateral harm would make comparative negligence optimal.

Keywords: Fault Regimes, Negligence, Optimal Care, Contributory Negligence, Comparative Negligence, Hand Formula

JEL Classification: K13, K4

Suggested Citation

Ogden, Benjamin and Hylton, Keith N., Incentives to Take Care Under Contributory and Comparative Fault (April 20, 2016). Boston Univ. School of Law, Law and Economics Research Paper No. 15-04. Available at SSRN: https://ssrn.com/abstract=2564260 or http://dx.doi.org/10.2139/ssrn.2564260

Benjamin Ogden (Contact Author)

Texas A&M University, Department of Political Science

College Station, TX 77843-4353
United States

Keith N. Hylton

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-8959 (Phone)
617-353-3077 (Fax)

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