NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Accuracy in the Assessment of Damages

Louis Kaplow, Steven Shavell

NBER Working Paper No. 4287 (Also Reprint No. r2063)
Issued in March 1993
NBER Program(s):   LE

Assessment of damages is a principle issue in litigation and, in light of this, we consider the social justification for, and the private benefits of, accurate measurement of harm. Greater accuracy induces parties to exercise levels of precaution that better reflect the magnitude of the harm they are likely to generate, and related, it stimulates uninformed parties to learn about risks before acting. However, accuracy in the assessment of harm cannot influence the behavior of parties -- and is therefore of no social value -- to the degree that parties lack knowledge of the harm they might cause when deciding on their precautions. In addition, regardless of the social value of accuracy, litigants generally gain by devoting resources toward proof of damages, leading often to socially excessive private incentives to establish damages.

download in pdf format
   (170 K)

download in djvu format
   (130 K)

email paper

This paper is available as PDF (170 K) or DjVu (130 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4287

Published: Journal of Law and Economics, vol. XXXIX, no. 1, pp. 191-210, April 1996. citation courtesy of

Users who downloaded this paper also downloaded these:
Kaplow w9842 Public Goods and the Distribution of Income
Kaplow and Shavell w9622 Fairness Versus Welfare: Notes on the Pareto Principle, Preferences, and Distributive Justice
Kaplow w3958 A Model of the Optimal Complexity of Rules
Kaplow w17765 On the Optimal Burden of Proof
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us