The Punitive Damages Calculus: The Differential Incidence of State Punitive Damages Reforms

42 Pages Posted: 2 Dec 2016  

Benjamin J. McMichael

Vanderbilt University - Owen Graduate School of Management

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Date Written: November 30, 2016

Abstract

State punitive damages reforms have altered how courts award punitive damages. We model the decision to award punitive damages as a two-step process involving the decision to award any punitive damages and the decision of what amount to award. For the Civil Justice Survey of State Courts samples of trial court verdicts, punitive damages caps reduce the amount of damages awarded but do not affect whether they are initially awarded. In contrast, the effect of punitive damages reforms on blockbuster punitive damages awards of at least $100 million is to reduce the incidence of these awards, but not their amount.

Keywords: punitive damages, tort reform, damages caps, blockbuster awards

JEL Classification: K13, K41

Suggested Citation

McMichael, Benjamin J. and Viscusi, W. Kip, The Punitive Damages Calculus: The Differential Incidence of State Punitive Damages Reforms (November 30, 2016). Vanderbilt Public Law Research Paper No. 16-52; Vanderbilt Law and Economics Research Paper No. 16-27. Available at SSRN: https://ssrn.com/abstract=2878056 or http://dx.doi.org/10.2139/ssrn.2878056

Benjamin J. McMichael

Vanderbilt University - Owen Graduate School of Management ( email )

401 21st Avenue South
Nashville, TN 37203
United States

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

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