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Getting Incentives RightImproving Torts, Contracts, and Restitution$
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Robert D. Cooter and Ariel Porat

Print publication date: 2014

Print ISBN-13: 9780691151595

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691151595.001.0001

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Total Liability for Excessive Harm

Total Liability for Excessive Harm

(p.74) 5 Total Liability for Excessive Harm
Getting Incentives Right

Robert D. Cooter

Ariel Porat

Princeton University Press

This chapter proposes a novel form of the negligence rule known as total liability for excessive harm to address situations in which several injurers cause harm and the court can verify the total harm caused by all injurers but not the degree of harm caused by each injurer. Under the rule of total liability for excessive harm, each individual injurer should be liable for the total harm that everyone causes in excess of the optimal harm. This rule creates efficient incentives because each injurer internalizes the marginal social benefit from reducing his excessive pollution, for example. The chapter first considers alternative liability rules such as strict liability, strict total liability, and proportionate liability, along with their limitations. It then explains the basic model of total liability for excessive harm and concludes with some real and hypothetical examples in which the rule could be applied to great advantage.

Keywords:   negligence, total liability, excessive harm, total harm, optimal harm, incentives, strict liability, strict total liability, proportionate liability

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