IDEAS home Printed from https://ideas.repec.org/a/bpj/jbvela/v2y2007i1n3.html
   My bibliography  Save this article

Economic Efficiency and Damage Awards in Personal Injury Torts

Author

Listed:
  • Schieren George A

    (Appalachian State University)

Abstract

Past discussions about economic efficiency and personal injury torts have focused on the relationship between the optimal amount of care a potential injurer should take for economic efficiency. Typically this discussion has assumed that the economic damages are strictly monetary without any full consideration of how these damages should be measured. This paper constructs a general model which incorporates as an unknown the amount of monetary damages that an injurer should pay in the interest of economic efficiency. The optimal amount of damages need to be known to serve as signal for the amount of care a potential injurer should take. The model shows that the optimal damage award should be at that point where that marginal utility of money paid out by the injurer equals the marginal utility of the money received by the victim under his utility function after the accident and not considering any non-monetary damages.

Suggested Citation

  • Schieren George A, 2007. "Economic Efficiency and Damage Awards in Personal Injury Torts," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 2(1), pages 1-20, April.
    • Handle: RePEc:bpj:jbvela:v:2:y:2007:i:1:n:3
    DOI: 10.2202/1932-9156.1007
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1932-9156.1007
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1932-9156.1007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Calfee, John E & Rubin, Paul H, 1992. "Some Implications of Damage Payments for Nonpecuniary Losses," The Journal of Legal Studies, University of Chicago Press, vol. 21(2), pages 371-411, June.
    2. Steven Shavell, 2003. "Economic Analysis of Accident Law," NBER Working Papers 9483, National Bureau of Economic Research, Inc.
    3. Arlen, Jennifer H, 1992. "Should Defendants' Wealth Matter?," The Journal of Legal Studies, University of Chicago Press, vol. 21(2), pages 413-429, June.
    4. Robert D. Cooter, 1991. "Economic Theories of Legal Liability," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 11-30, Summer.
    5. George A. Schieren, 1998. "The Economic Framework Of Personal Injury/Wrongful Death Damages," Journal of Forensic Economics, National Association of Forensic Economics, vol. 11(1), pages 33-46, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cooter, Robert D., 2003. "Hand Rule Damages for Incompensable Losses," Berkeley Olin Program in Law & Economics, Working Paper Series qt5rf3f1m2, Berkeley Olin Program in Law & Economics.
    2. Hoffmann, Sandra A. & Hanemann, W. Michael, 2005. "Torts and the Protection of 'Legally Recognized Interests'," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt1j8691zn, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Dari-Mattiacci, Giuseppe & Langlais, Eric, 2012. "Social Wealth and Optimal Care," International Review of Law and Economics, Elsevier, vol. 32(2), pages 271-284.
    4. Zivin, Joshua Graff & Just, Richard E. & Zilberman, David, 2005. "Risk Aversion, Liability Rules, and Safety," International Review of Law and Economics, Elsevier, vol. 25(4), pages 604-623, December.
    5. Hoffmann, Sandra A. & Hanemann, W. Michael, 2005. "Torts and the Protection of 'Legally Recognized Interests'," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt1j8691zn, Department of Agricultural & Resource Economics, UC Berkeley.
    6. Satish K. Jain & Rajendra P. Kundu, 2004. "Economic Efficiency, Distributive Justice and Liability Rules," Working papers 130, Centre for Development Economics, Delhi School of Economics.
    7. Ganuza Juan-Jose & Gomez Fernando, 2006. "Caution, Children Crossing: Heterogeneity of Victim's Cost of Care and the Negligence Rule," Review of Law & Economics, De Gruyter, vol. 1(3), pages 365-397, January.
    8. Fraser, Clive D., 1996. "On tort as an implicit insurance system with state-dependent utility: The case of child mortality risk," International Review of Law and Economics, Elsevier, vol. 16(4), pages 449-459, December.
    9. Usher, Dan, 2001. "Personal goods, efficiency and the law," European Journal of Political Economy, Elsevier, vol. 17(4), pages 673-703, November.
    10. Cooter, Robert D., 1997. "Commodifying Liability," Berkeley Olin Program in Law & Economics, Working Paper Series qt9pq4m8ts, Berkeley Olin Program in Law & Economics.
    11. Sjur Didrik Flåm & Elmar G. Wolfstetter, 2015. "Liability Insurance and Choice of Cars: A Large Game Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 943-963, December.
    12. Friehe, Tim & Langlais, Eric, 2017. "Prevention and cleanup of dynamic harm under environmental liability," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 107-120.
    13. Kvaløy, Ola & Olsen, Trond E., 2015. "The tenuous relationship between effort and performance pay," Journal of Public Economics, Elsevier, vol. 121(C), pages 32-39.
    14. Janet Currie & W. Bentley MacLeod, 2008. "First Do No Harm? Tort Reform and Birth Outcomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 795-830.
    15. Sofia Amaral-Garcia, 2015. "Non-economic Damages in Medical Malpractice Appeals: Does the Jurisdiction Make a Difference?," Discussion Papers of DIW Berlin 1506, DIW Berlin, German Institute for Economic Research.
    16. Lakdawalla, Darius & Zanjani, George, 2005. "Insurance, self-protection, and the economics of terrorism," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1891-1905, September.
    17. Michelle J. White, 2004. "Asbestos and the Future of Mass Torts," NBER Working Papers 10308, National Bureau of Economic Research, Inc.
    18. Henry van Egteren & R. Smith, 2002. "Environmental Regulations Under Simple Negligence or Strict Liability," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(4), pages 367-394, April.
    19. Juan José Ganuza & Fernando Gómez, 2003. "Optimal negligence rule under limited liability," Economics Working Papers 759, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2004.
    20. A. Mitchell Polinsky & Steven Shavell, 2012. "Mandatory Versus Voluntary Disclosure of Product Risks," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(2), pages 360-379.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:jbvela:v:2:y:2007:i:1:n:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.