Free Speech and Cheap Talk
50 Pages Posted: 7 Feb 2019
Date Written: January 25, 2019
The traditional view of defamation liability conceives of the law as seeking to strike a balance between the deterrence effect on potential liars and the chilling effect on potential truthtellers. This article presents a new framework for analyzing defamation liability that serves both to clarify and complicate understandings of the law’s consequences for potential speakers, for potential victims, and for the marketplace of ideas. In addition to the familiar deterrence and chilling effects, we show how defamation liability also can generate what we call a “warming effect”: because a background of liability makes statements more credible, potential speakers who care whether audiences take their statements as true will have more to gain from making those statements when defamation laws are more plaintiff-friendly. We explain why the warming effect of defamation liability may induce individuals who otherwise would have remained silent to instead speak out, thus partly or wholly offsetting the law’s chilling effect. We go on to consider the nuanced effects of defamation liability on victims. We demonstrate—among other potentially counterintuitive propositions—that a plaintiff-friendly liability regime may exacerbate the harms that victims of defamation liability face under certain circumstances. We then consider the possibility of “self-tailored” defamation law, with victims or speakers selecting the defamation liability regime that applies to them. We conclude that speaker-side self-tailoring is likely to have salutary effects both on speakers and on the marketplace of ideas, though with much more ambiguous implications for defamation victims. Ultimately, we seek to show how our analytical framework can inform and enrich the study of defamation law and the search for welfare-enhancing liability regimes.
Keywords: defamation, libel, slander, torts, tort law, signaling, free speech, First Amendment
JEL Classification: K13, K15
Suggested Citation: Suggested Citation