Economic Analysis of Infringement Damages (Figure)

Author: Wang Cheng
Publisher:
Publish Date: 2002-06-01
Features: After providing a relatively detailed introduction to the economic analytical methods themselves, the author discusses important issues in tort law, such as negligence, no-fault liability, causation, the calculation of damages, and force majeure. The author argues that the law should be an overall framework centered around incentives rather than coercion. A good tort compensation system should incentivize parties to invest in appropriate prevention to avoid losses. The economic rationale for negligence and force majeure is efficiency. A legal arrangement must achieve a Nash equilibrium; otherwise, parties always have incentives to evade the law. After providing a relatively detailed introduction to the economic analytical methods themselves, the author discusses important issues in tort law, such as negligence, no-fault liability, causation, the calculation of damages, and force majeure. The author argues that the law should be an overall framework centered around incentives rather than coercion. A good tort compensation system should incentivize parties to invest in appropriate prevention to avoid losses. The economic rationale for negligence and force majeure is efficiency. A legal arrangement must achieve a Nash equilibrium; otherwise, parties always have incentives to evade the law.