Costly Litigation and Optimal Damages / A. Mitchell Polinsky, Steven Shavell.

Format:

Book

Author/Creator:

Polinsky, A. Mitchell.

Contributor:

National Bureau of Economic Research.

Shavell, Steven.

Series:

Working Paper Series (National Bureau of Economic Research) no. w18594.

NBER working paper series no. w18594

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2012.

Summary:

A basic principle of law is that damages paid by a liable party should equal the harm caused by that party. However, this principle is not correct when account is taken of litigation costs, because they too are part of the social costs associated with an injury. In this article we examine the influence of litigation costs on the optimal level of damages, assuming that litigation costs rise with the level of damages.

Notes:

Print version record

December 2012.