Do Excessive Legal Standards Discourage Desirable Activity?

7 Pages Posted: 31 Jul 2006

See all articles by Steven Shavell

Steven Shavell

Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: February 2006

Abstract

Overly strict legal standards are commonly thought to discourage parties from engaging in socially desirable activities. It is explained here, however, that excessive legal standards cannot lead to undesirable curtailment of activities when legal standards are enforced by liability for negligence, essentially because parties can choose to be negligent rather than comply. But excessive legal standards can lead to undesirable reduction of activities when adherence to the standards is required by the regulatory system.

Keywords: standards, regulation, liability, negligence

JEL Classification: D00, H8, K13, K23, L5

Suggested Citation

Shavell, Steven, Do Excessive Legal Standards Discourage Desirable Activity? (February 2006). Harvard Law and Economics Discussion Paper No. 540. Available at SSRN: https://ssrn.com/abstract=921423 or http://dx.doi.org/10.2139/ssrn.921423

Steven Shavell (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-495-3668 (Phone)
617-496-2256 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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