This chapter consists of a general survey of the main results obtained by the law and economics approach in the field of tort law. It is meant to give a basic overview of the main framework of analysis and suggestions for further insights. Since so far the analysis has centred mainly on American law, much is still to be said in the economic analysis of tort liability in civil law countries.
2.14. References.
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Figures
Figure 1: the basic model
0 x* x
p(x)H + c(x) c(x)
p(x)H Social cost, p(x)H + c(x)
Expected accident cost, p(x)H Cost of precaution, c(x)
0 xs x* x
p(x)H + c2(x) c2(x)
p(x)H + c1(x) c1(x)
p(x)H Social cost, p(x)H + c(x)
Expected accident cost, p(x)H Least cost of precaution, c1(x) Cost of precaution for the other party, c2(x)
Figure 2: alternative precaution
0 xd=x* x
p(x)H + c(x) c(x)
p(x)H Social cost, p(x)H + c(x)
Expected accident cost, p(x)H Cost of care, c(x)
Figure 3: fault-based liability
D C B A
0 xd x
p(x)H + c(x) c(x)
p(x)H Social cost, p(x)H + c(x)
Expected accident cost, p(x)H Cost of care, c(x)
Figure 4: causation and negligence
p(x)H + c(x) c(x)
p(x)H
Figure 5: causation and negligence – due care higher than optimal care D
C B A
0 x* xd x E
Social cost, p(x)H + c(x) Expected accident cost, p(x)H Cost of care, c(x)