Incentivized Torts: An Empirical Analysis
Northwestern Law Review, Forthcoming
53 Pages Posted: 30 Jul 2020
Date Written: July 27, 2020
Courts and scholars assume that group causation theories (e.g., concerted action) deter wrongdoers. This article empirically tests, and rejects, this assumption, using a series of incentivized laboratory experiments. Contrary to common belief, data from over 200 subjects shows that group liability can encourage tortious behavior and incentivize individuals to act with as many tortfeasors as possible. Surprisingly, we find that subjects can be just as likely to commit a tort under a liability regime as they would be when facing no tort liability. Group liability can also incentivize a tort by making subjects perceive it as fairer to victims and society. These findings are consistent across a series of robustness checks, including both regression analysis and non-parametric tests.
We also test courts’ and scholarly insistence that the but-for test fails in cases subject to group causation. We use a novel experimental design that allows us to test whether, and to what extent, each individual’s decision to engage in a tortious activity is influenced by the decisions of others. Upending conventional belief, we find strong evidence that the but-for test operates in group causation settings (e.g. concurrent causes). Moreover, in our experiments, subjects’ reliance on but-for causation produced the very tort that group liability attempted to discourage.
A major function of liability in torts, criminal law and other areas of the law is to deter actors from engaging in socially undesirable activities. The same is said about doctrines that result in group liability. Our empirical results challenge this basic logic.
Keywords: torts, law and economics, dilution of liability, strategy method, regression analysis, incentivized experiments, alternative liability, substantial factor, concurrent causes, but for, causation, group liability, group wrongdoing, empirical analysis
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