IDEAS home Printed from https://ideas.repec.org/p/cdl/oplwec/qt7h38w307.html
   My bibliography  Save this paper

Punitive Damages, Social Norms, and Economic Analysis

Author

Listed:
  • Cooter, Robert D.

Abstract

Law and morality forbid acts that cause uncompensable harms or create unreasonable risks. When people intentionally commit such acts, courts express anger and indignation at the wrongdoer through speech and punishment. In a system of social norms with multiple equilibria, expressions of emotion signal commitment and coordinate expectations. In a system of social norms with a unique, stable equilibrium, legal sactions deter marginally. Social norms, however, provide a better guide to the need for punitive damages than to their extent. Courts make a serious error in asking jurors to assign punitive damages without providing detailed instructions on their computation. The court in a typical case should impose the minimum punishment required to deter wrongdoing.

Suggested Citation

  • Cooter, Robert D., 1999. "Punitive Damages, Social Norms, and Economic Analysis," Berkeley Olin Program in Law & Economics, Working Paper Series qt7h38w307, Berkeley Olin Program in Law & Economics.
    • Handle: RePEc:cdl:oplwec:qt7h38w307
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/7h38w307.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cooter, Robert, 1998. "Expressive Law and Economics," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 585-608, June.
    2. Abhijit Banerjee & Jörgen W. Weibull & Ken Binmore, 1996. "Evolution and Rationality: Some Recent Game-Theoretic Results," International Economic Association Series, in: Beth Allen (ed.), Economics in a Changing World, chapter 4, pages 90-117, Palgrave Macmillan.
    3. Robert D. Cooter, 1991. "Economic Theories of Legal Liability," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 11-30, Summer.
    4. Robert Cooter, 1998. "Expressive Law and Economics," CESifo Working Paper Series 161, CESifo.
    5. Eisenberg, Theodore & Goerdt, John & Ostrom, Brian & Rottman, David & Wells, Martin T, 1997. "The Predictability of Punitive Damages," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 623-661, June.
    6. JohnE. Calfee & CLifford Winston, 1993. "The Consumer Welfare Effects of Liability for Pain and Suffering: An Exploratory Analysis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1 Microec), pages 133-196.
    7. Cooter, Robert, 1998. "Expressive Law and Economics," Berkeley Olin Program in Law & Economics, Working Paper Series qt3w34j60j, Berkeley Olin Program in Law & Economics.
    8. Landes, William M. & Posner, Richard A., 1981. "An economic theory of intentional torts," International Review of Law and Economics, Elsevier, vol. 1(2), pages 127-154, 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. Daron Acemoglu & Matthew O. Jackson, 2017. "Social Norms and the Enforcement of Laws," Journal of the European Economic Association, European Economic Association, vol. 15(2), pages 245-295.
    2. Bartels, Lara & Kesternich, Martin, 2022. "Motivate the crowd or crowd- them out? The impact of local government spending on the voluntary provision of a green public good," ZEW Discussion Papers 22-040, ZEW - Leibniz Centre for European Economic Research.
    3. Abraham, Diya & Corazzini, Luca & Fišar, Miloš & Reggiani, Tommaso, 2023. "Coordinating donations via an intermediary: The destructive effect of a sunk overhead cost," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 287-304.
    4. Galbiati, Roberto & Vertova, Pietro, 2008. "Obligations and cooperative behaviour in public good games," Games and Economic Behavior, Elsevier, vol. 64(1), pages 146-170, September.
    5. Aspasia Tsaoussi & Eleni Zervogianni, 2010. "Judges as satisficers: a law and economics perspective on judicial liability," European Journal of Law and Economics, Springer, vol. 29(3), pages 333-357, June.
    6. Douhou, Salima & Magnus, Jan R. & van Soest, Arthur, 2011. "The perception of small crime," European Journal of Political Economy, Elsevier, vol. 27(4), pages 749-763.
    7. Riedel, Nadine & Schildberg-Hörisch, Hannah, 2013. "Asymmetric obligations," Journal of Economic Psychology, Elsevier, vol. 35(C), pages 67-80.
    8. Sugiyama, Yuri, 2022. "Can Soft Law Improve the Welfare of Sexual Minorities? The Case of Same-sex Partnership Policy in Japan," CEI Working Paper Series 2022-06, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    9. Prasenjit Banerjee & Vegard Iversen & Sandip Mitra & Antonio Nicolò & Kunal Sen, 2018. "Politicians and Their Promises in an Uncertain World: Evidence from a Lab-in-the-Field Experiment in India," Economics Discussion Paper Series 1806, Economics, The University of Manchester.
    10. Bicchieri, Cristina & Dimant, Eugen & Xiao, Erte, 2021. "Deviant or wrong? The effects of norm information on the efficacy of punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 209-235.
    11. Fluet, Claude & Galbiati, Rpbertp, 2016. "Lois et normes : les enseignements de l'économie comportementale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 191-215, Mars-Juin.
    12. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    13. Loet Stekelenburg & Peter T. Dijkstra & Elianne F. Steenbergen & Jessanne Mastop & Naomi Ellemers, 2023. "Integrating Norms, Knowledge, and Social Ties into the Deterrence Model of Cartels: A Survey Study of Business Executives," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(3), pages 275-315, November.
    14. Farrow, Katherine & Romaniuc, Rustam, 2019. "The stickiness of norms," International Review of Law and Economics, Elsevier, vol. 58(C), pages 54-62.
    15. David Dickinson & E. Glenn Dutcher & Cortney Rodet, 2015. "Observed punishment spillover effects: a laboratory investigation of behavior in a social dilemma," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 136-153, March.
    16. Sebastian Kube & Christian Traxler, 2011. "The Interaction of Legal and Social Norm Enforcement," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 639-660, October.
    17. Bruce Benson, 2018. "The institutional determinants of self-governance: a comment on Edward Stringham’s Private Governance," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(2), pages 209-230, June.
    18. Jeffrey A. Flory & Andreas Leibbrandt & John A. List, 2016. "The Effects of Wage Contracts on Workplace Misbehaviors: Evidence from a Call Center Natural Field Experiment," NBER Working Papers 22342, National Bureau of Economic Research, Inc.
    19. Richard H. McAdams & Janice Nadler, 2005. "Testing the Focal Point Theory of Legal Compliance: The Effect of Third‐Party Expression in an Experimental Hawk/Dove Game," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 2(1), pages 87-123, March.
    20. Torgler, Benno, 2011. "Tax morale and compliance : review of evidence and case studies for Europe," Policy Research Working Paper Series 5922, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    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:cdl:oplwec:qt7h38w307. 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: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/lebrkus.html .

    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.