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Deterrence and liability for intentional torts

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  • Klick, Jonathan
  • MacDonald, John

Abstract

Law and economics suggests that liability for intentional torts is motivated by deterrence. The tortfeasor’s investments in undertaking the intentional act and the victim’s investments in precautions against the harm arising from the act are likely to be socially wasteful. Further, especially in the case of battery, the benefit of committing the intentional act will generally fall short of the loss to the victim. For these reasons, it makes sense to impose liability on the tortfeasor for the full loss experienced by the victim of an intentional tort. This deterrence theory requires that intentional tortfeasors are sensitive to liability exposure. To test this assumption, we examine changes in state-level homicide rates in response to caps on non-economic damages in tort. We find that murder rates increase by more than 5 percent when states adopt caps on non-economic damages.

Suggested Citation

  • Klick, Jonathan & MacDonald, John, 2020. "Deterrence and liability for intentional torts," International Review of Law and Economics, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:irlaec:v:63:y:2020:i:c:s0144818820301393
    DOI: 10.1016/j.irle.2020.105926
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    References listed on IDEAS

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    1. Tom Baker, "undated". "Blood Money, New Money, and the Moral Economy of Tort Law in Action," University of Connecticut School of Law Working Papers uconn_ucwps-1005, University of Connecticut School of Law.
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    6. Jonathan Klick & Sven Neelsen & Thomas Stratmann, 2012. "The Relationship between Abortion Liberalization and Sexual Behavior: International Evidence," American Law and Economics Review, American Law and Economics Association, vol. 14(2), pages 457-487.
    7. Tom Baker, "undated". "Insurance and the Law," University of Connecticut School of Law Working Papers uconn_ucwps-1004, University of Connecticut School of Law.
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    10. Michael Frakes, 2012. "Defensive Medicine and Obstetric Practices," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 9(3), pages 457-481, September.
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    Cited by:

    1. Hong Mao & Krzysztof Ostaszewski, 2021. "Optimal Claim Settlement Strategies under Constraint of Cap on Claim Loss," Mathematics, MDPI, vol. 9(24), pages 1-12, December.

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