Reconciling Experimental Incoherence with Real-World Coherence in Punitive Damages

Abstract

Experimental evidence generated in controlled laboratory studies suggests that the legal system in general, and punitive damages awards in particular, should display an incoherent pattern. According to the prediction, inexperienced decision makers, such as juries, should fail to convert their qualitative judgments of defendants' conduct into consistent, meaningful dollar amounts. This Article tests this prediction and finds modest support for the thesis that experience across different types of cases will lead to greater consistency in awards. Despite this support, numerous studies of damage awards in real cases detect a generally sensible pattern of damage awards. The article tries to reconcile the largely coherent pattern of real-world results with the experimental findings and suggests that careful attention to sources of coherence and incoherence can help reconcile experimental and real-world results.

JEL Classification: K4