Accuracy in the Assessment of Damages

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Accuracy in the Assessment of Damages

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Title: Accuracy in the Assessment of Damages
Author: Kaplow, Louis; Shavell, Steven

Note: Order does not necessarily reflect citation order of authors.

Citation: Louis Kaplow and Steven Shavell, Accuracy in the Assessment of Damages, 39 J. L. Econ. 191 (1996).
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Abstract: Assessment of damages is a principal 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 injurers to exercise levels of precaution that better reflect the magnitude of the harm they are likely to generate, and, relatedly, it stimulates uninformed injurers to learn about risks before acting. However, accuracy in assessment of harm cannot influence the behavior of injurers-and is therefore of no social value-to the degree that they lack knowledge of the harm they might cause when deciding on their precautions. 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.
Published Version: http://www.jstor.org/stable/725773
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:10611796
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