Negligence, Causation, and Incentives for Care, with Keith Hylton
2013, International Review of Law and Economics
Haizhen Lin, Keith Hylton
We present a new model of negligence and causation and examine the influence of the negligence test, in the presence of intervening causation, on the level of care. In this model, the injurer’s decision to take care reduces the likelihood of an accident only in the event that some nondeterministic intervention occurs. The effects of the negligence test depend on the information available to the court, and the manner in which the test is implemented. The key effect of the negligence test, in the presence of intervening causation, is to induce actors to take into account the distribution of the intervention probability as well as its expected value. In the most plausible scenario – where courts have limited information – the test generally leads to socially excessive care.
Lin, Haizhen, and Keith Hylton (2013), "Negligence, Causation, and Incentives for Care," International Review of Law and Economics, 35, 80-89.