Does Evidentiary Uncertainty Induce Excessive Injurer Care?

Abstract

We derive the precise conditions under which over- or under-compliance can take place under imperfect information about the care levels chosen by both injurer and victim in a tort litigation. The conditions identified turn out to be more complicated than are usually presumed in the literature. A correct evaluation requires us to consider both the pure uncertainty effect as well as the feedback effect. Properly done, the overall effects of uncertainty on care levels are always indeterminate, depending on various factors such as costs of care, the size of expected accident loss, the degree of dispersion and bias of the judgment error distribution.

Keywords: tort law, negligence rules, uncertainty

JEL Classification: K13