On the Optimal Negligence Standard in Tort Law When One Party is a Long-run and the Other a Short-run Player

Abstract

It is well established that courts should and in fact do require a higher level of care by people working within their profession than by amateurs. Adequate care is simply more within reach for the professional than for the amateur (less ‘costly’). This article analyzes whether a further distinction between the professional and the amateur should influence the way courts set negligence standards: the professional is more likely to invest in acquiring information concerning negligence standards, and the professional is hence more likely than the amateur to be influenced by the standards. This issue is analyzed for the case where the professional is the injurer and the amateur is the victim. The amateur is assumed not to acquire any information concerning standards, and the behavior of the amateur is taken as exogenously fixed. Under this assumption, the negligence standard applied to the professional may be either higher or lower than first best, depending on whether care levels by the injurer and the victim are substitutes or complements and on whether, in the absence of information, the amateur over- or under-estimates the standard applied to him or her.

Citation

Lando, H. (2007), "On the Optimal Negligence Standard in Tort Law When One Party is a Long-run and the Other a Short-run Player", Zerbe, R.O. and Kirkwood, J.B. (Ed.) Research in Law and Economics (Research in Law and Economics, Vol. 22), Emerald Group Publishing Limited, Leeds, pp. 207-216. https://doi.org/10.1016/S0193-5895(06)22006-2