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Precaution v. avoidance: A comparison of liability rules

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  • Friehe, Tim

Abstract

The economic analysis of liability rules sponsors strict liability in the case that only injurers can take care to affect expected harm. Yet, negligence is usually the base line in jurisdictions around the world. We establish that negligence is superior if injurers can invest in both care-taking and avoidance activities.

Suggested Citation

  • Friehe, Tim, 2009. "Precaution v. avoidance: A comparison of liability rules," Economics Letters, Elsevier, vol. 105(3), pages 214-216, December.
    • Handle: RePEc:eee:ecolet:v:105:y:2009:i:3:p:214-216
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    References listed on IDEAS

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Arun S. Malik, 1990. "Avoidance, Screening and Optimum Enforcement," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 341-353, Autumn.
    3. Eric Langlais, 2008. "Detection Avoidance and Deterrence: Some Paradoxical Arithmetic," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(3), pages 371-382, June.
    4. Innes, Robert, 2001. "Violator Avoidance Activities and Self-Reporting in Optimal Law Enforcement," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 239-256, April.
    5. Juan José Ganuza & Fernando Gómez, 2008. "Realistic Standards: Optimal Negligence with Limited Liability," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 577-594, June.
    6. Tabbach Avraham D & Nussim Jacob, 2008. "Controlling Avoidance: Ex Ante Regulation Versus Ex Post Punishment," Review of Law & Economics, De Gruyter, vol. 4(1), pages 45-63, March.
    7. Young, Robert & Faure, Michael & Fenn, Paul, 2006. "Defences in negligence: Implications for tortfeasor care," International Review of Law and Economics, Elsevier, vol. 26(1), pages 67-87, March.
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