Publicity and the Optimal Punitive Damage Multiplier

U.S. Federal Trade Commission, Bureau of Economics Working Paper No. 236

30 Pages Posted: 13 Mar 2018

See all articles by John M. Yun

John M. Yun

George Mason University - Antonin Scalia Law School

Date Written: January 31, 2001

Abstract

When punitive damage awards create publicity, this could affect the behavior of uncompensated victims, which has implications for the optimal punitive damage multiplier. A new adjusted multiplier is derived that incorporates publicity into the analytical framework. Assuming that all victims receive uniform punitive awards, the result is a lower punitive multiplier relative to the standard result. The extent of the adjustment will depend on the likelihood of publicity, the strength of the publicity, and the number of victims. Finally, under certain litigation cost conditions, if courts allow heterogeneous punitive awards, then efficiency is improved relative to uniform awards.

Keywords: punitive damages, punitive multiplier, publicity, tort reform

JEL Classification: D83, K13, K41

Suggested Citation

Yun, John M., Publicity and the Optimal Punitive Damage Multiplier (January 31, 2001). U.S. Federal Trade Commission, Bureau of Economics Working Paper No. 236, Available at SSRN: https://ssrn.com/abstract=3136819 or http://dx.doi.org/10.2139/ssrn.3136819

John M. Yun (Contact Author)

George Mason University - Antonin Scalia Law School ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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