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Diagnoses and Medical Malpractice: A Comparison of Negligence and Strict Liability Systems

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  • Marilyn J. Simon

Abstract

This article examines the incentive structures that the negligence and strict liability systems provide for physicians. Other articles have analyzed the effects of these rules when an increase in care will reduce the probability of an accident. In a large class of decisions, a physician cannot reduce the probability of an accident by increasing care. He can reduce the probability of one type of accident only by increasing the probability of another. It is shown that for this class of decisions, the negligence system is more effective than strict liability in altering the decisionmaker's utility function to reflect social costs.

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  • Marilyn J. Simon, 1982. "Diagnoses and Medical Malpractice: A Comparison of Negligence and Strict Liability Systems," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 170-180, Spring.
    • Handle: RePEc:rje:bellje:v:13:y:1982:i:spring:p:170-180
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    Cited by:

    1. Yongmin Chen & Jianpei Li & Jin Zhang, 2022. "Efficient Liability In Expert Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1717-1744, November.
    2. Chen, Yongmin & Li, Jianpei & Zhang, Jin, 2017. "Liability in Markets for Credence Goods," MPRA Paper 80206, University Library of Munich, Germany.
    3. Bala V. Balachandran & Nandu J. Nagarajan, 1986. "Imperfect information, insurance, and auditors' legal liability," Contemporary Accounting Research, John Wiley & Sons, vol. 3(1), pages 281-301, September.
    4. Sverre Grepperud, 2005. "Medical Errors: Mandatory Reporting, Voluntary Reporting, or Both?," European Journal of Law and Economics, Springer, vol. 20(1), pages 99-112, July.
    5. Dylan Martin-Lapoirie, 2022. "Teamwork in health care and medical malpractice liability: an experimental investigation," European Journal of Law and Economics, Springer, vol. 54(2), pages 251-282, October.
    6. Jennifer Arlen & W. Bentley MacLeod, 2005. "Torts, Expertise, and Authority: Liability of Physicians and Managed Care Organizations," RAND Journal of Economics, The RAND Corporation, vol. 36(3), pages 494-519, Autumn.

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