TY  - JOUR
AU  - Polinsky,A. Mitchell
AU  - Shavell,Steven
TI  - Costly Litigation and Optimal Damages
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18594
PY  - 2012
Y2  - December 2012
UR  - http://www.nber.org/papers/w18594
L1  - http://www.nber.org/papers/w18594.pdf
N1  - Author contact info:
A. Mitchell Polinsky
Stanford Law School
Stanford University
Stanford, CA  94305
Tel: 650/723-0886
Fax: 650/723-3557
E-Mail: polinsky@stanford.edu

Steven Shavell
Harvard Law School
1575 Massachusetts Avenue
Hauser Hall 508
Cambridge, MA  02138
Tel: 617/495-3668
Fax: 617/496-2256
E-Mail: shavell@law.harvard.edu
AB  - 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.
ER  -