Harvard University Press, 1987 Paper: 978-0-674-02417-5 | Cloth: 978-0-674-22525-1 | eISBN: 978-0-674-04351-0 Library of Congress Classification K923.S5 1987 Dewey Decimal Classification 346.7303

ABOUT THIS BOOK | TOC

ABOUT THIS BOOK Accident law, if properly designed, is capable of reducing the incidence of mishaps by making people act more cautiously. Scholarly writing on this branch of law traditionally has been concerned with examining the law for consistency with felt notions of right and duty. Since the 1960s, however, a group of legal scholars and economists have focused on identifying the effects of accident law on people's behavior. Steven Shavell's book is the definitive synthesis of research to date in this new field.

TABLE OF CONTENTS

Contents

1.

Introduction

Use of Models to Examine Two Types of Theoretical Questions

Organization of the Book

2.

Liability and Deterrence: Basic Theory

Levels of Care the Only Determinant of Risk: Unilateral Accidents

Levels of Care the Only Determinant of Risk: Bilateral Accidents

Levels of Care and Levels of Activity the Determinants of Risk: Unilateral Accidents

Levels of Care and Levels of Activity the Determinants of Risk: Bilateral Accidents

MATHEMATICAL APPENDIX

3.

Liability of Firms

The Case Where Victims Are Strangers to Firms

The Case Where Victims Are Customers of Firms

MATHEMATICAL APPENDIX

4.

Factors Bearing on the Determination of Negligence

Differences among Parties

Prior Precautions

Uncertainty, Error, and Misperception

Implications of Findings of Negligence

MATHEMATICAL APPENDIX

5.

Causation and the Scope of Liability

Accidents Caused by Injurers

Coincidental Accidents

Uncertainty over Causation

MATHEMATICAL APPENDIX

6.

The Magnitude of Liability: Damages

The Level of Losses

The Probability of Losses

Courts' Uncertainty about the Level of Losses

Pecuniary versus Nonpecuniary Losses

Economic Losses

Particularistic Elements in the Computation of Liability

Victims' Opportunities to Mitigate Losses

Liability in Excess of Losses

MATHEMATICAL APPENDIX

7.

Other Topics in Liability

Multiple Injurers

Injurers' Inability to Pay for Losses

Vicarious Liability

Limited Liability of Shareholders for the Losses Caused by Corporations

MATHEMATICAL APPENDIX

8.

The Allocation of Risk and the Theory of Insurance

Risk Aversion and the Allocation of Risk

The Theory of Insurance

MATHEMATICAL APPENDIX

9.

Liability, Risk-bearing, and Insurance: Basic Theory

Risk Aversion and the Socially Ideal Solution to the Accident Problem

The Accident Problem in the Absence of Liability

The Accident Problem Given Liability Alone

The Accident Problem Given Liability and Insurance

MATHEMATICAL APPENDIX

10.

Liability, Risk-bearing, and Insurance: Extensions to the Basic Theory

Nonpecuniary Losses and Insurance

Awards Optimal for Compensation versus Awards Optimal for Deterrence

Victims' Collateral Insurance Benefits and Injurers' Liability

Injurers' Inability to Pay and Liability Insurance

Structure of a System of Pure Accident Insurance

MATHEMATICAL APPENDIX

11.

Liability and Administrative Costs

Factors Determining Administrative Costs

The Private Motive to Make Claims versus Their Social Desirability

MATHEMATICAL APPENDIX

12.

Liability versus Other Approaches to the Control of Risk

The Different Approaches to the Control of Risk

Factors Bearing on the Appeal of Ex Ante versus Ex Post Approaches

Factors Bearing on the Desirability of Privately Initiated versus State-Initiated Approaches

Factors Bearing on the Appeal of Nonmonetary, Criminal Sanctions

Harvard University Press, 1987 Paper: 978-0-674-02417-5 Cloth: 978-0-674-22525-1 eISBN: 978-0-674-04351-0

Accident law, if properly designed, is capable of reducing the incidence of mishaps by making people act more cautiously. Scholarly writing on this branch of law traditionally has been concerned with examining the law for consistency with felt notions of right and duty. Since the 1960s, however, a group of legal scholars and economists have focused on identifying the effects of accident law on people's behavior. Steven Shavell's book is the definitive synthesis of research to date in this new field.

TABLE OF CONTENTS

Contents

1.

Introduction

Use of Models to Examine Two Types of Theoretical Questions

Organization of the Book

2.

Liability and Deterrence: Basic Theory

Levels of Care the Only Determinant of Risk: Unilateral Accidents

Levels of Care the Only Determinant of Risk: Bilateral Accidents

Levels of Care and Levels of Activity the Determinants of Risk: Unilateral Accidents

Levels of Care and Levels of Activity the Determinants of Risk: Bilateral Accidents

MATHEMATICAL APPENDIX

3.

Liability of Firms

The Case Where Victims Are Strangers to Firms

The Case Where Victims Are Customers of Firms

MATHEMATICAL APPENDIX

4.

Factors Bearing on the Determination of Negligence

Differences among Parties

Prior Precautions

Uncertainty, Error, and Misperception

Implications of Findings of Negligence

MATHEMATICAL APPENDIX

5.

Causation and the Scope of Liability

Accidents Caused by Injurers

Coincidental Accidents

Uncertainty over Causation

MATHEMATICAL APPENDIX

6.

The Magnitude of Liability: Damages

The Level of Losses

The Probability of Losses

Courts' Uncertainty about the Level of Losses

Pecuniary versus Nonpecuniary Losses

Economic Losses

Particularistic Elements in the Computation of Liability

Victims' Opportunities to Mitigate Losses

Liability in Excess of Losses

MATHEMATICAL APPENDIX

7.

Other Topics in Liability

Multiple Injurers

Injurers' Inability to Pay for Losses

Vicarious Liability

Limited Liability of Shareholders for the Losses Caused by Corporations

MATHEMATICAL APPENDIX

8.

The Allocation of Risk and the Theory of Insurance

Risk Aversion and the Allocation of Risk

The Theory of Insurance

MATHEMATICAL APPENDIX

9.

Liability, Risk-bearing, and Insurance: Basic Theory

Risk Aversion and the Socially Ideal Solution to the Accident Problem

The Accident Problem in the Absence of Liability

The Accident Problem Given Liability Alone

The Accident Problem Given Liability and Insurance

MATHEMATICAL APPENDIX

10.

Liability, Risk-bearing, and Insurance: Extensions to the Basic Theory

Nonpecuniary Losses and Insurance

Awards Optimal for Compensation versus Awards Optimal for Deterrence

Victims' Collateral Insurance Benefits and Injurers' Liability

Injurers' Inability to Pay and Liability Insurance

Structure of a System of Pure Accident Insurance

MATHEMATICAL APPENDIX

11.

Liability and Administrative Costs

Factors Determining Administrative Costs

The Private Motive to Make Claims versus Their Social Desirability

MATHEMATICAL APPENDIX

12.

Liability versus Other Approaches to the Control of Risk

The Different Approaches to the Control of Risk

Factors Bearing on the Appeal of Ex Ante versus Ex Post Approaches

Factors Bearing on the Desirability of Privately Initiated versus State-Initiated Approaches

Factors Bearing on the Appeal of Nonmonetary, Criminal Sanctions