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Title: Legal Liability when Individuals Have Moral Concerns
Authors: Deffains, Bruno
Fluet, Claude
Keywords: Intrinsic motivations
Social norms
Esteem
Strict liability
Negligence
Crowding out
Issue Date: 2009-11
Series/Report no.: Cahiers du CIRPÉE;09-51
Abstract: We incorporate normative motivations into the economic model of accidents and tort rules. The social norm is that one should avoid harming others and should compensate if nevertheless harm is caused. To some extent, this is internalized through intrinsic moral concerns; moreover, those thought not to adhere to the norm are met with social disapproval. Moral and reputational concerns are not strong enough, however, for injurers to willingly compensate their victims. Absent legal liability, normative concerns induce precautions to prevent harm but precautions are then socially inefficient. By contrast, perfectly enforced legal liability crowds out informal incentives completely (e.g., individuals causing harm suffer no stigma) but precautions are then socially efficient. Under imperfectly enforced legal liability, formal legal sanctions and normative concerns are complements and interact to induce more precautions than under no-liability.
URI: https://depot.erudit.org/id/003144dd
Appears in Collections:Cahiers de recherche du CIRPÉE

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