A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation

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A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation

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Title: A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation
Author: Shavell, Steven
Citation: Steven Shavell, A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation, 42 J. of Legal Stud. (2013).
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Abstract: Regulation and the negligence rule are both designed to obtain compliance with desired standards of behavior, but they differ in a primary respect: compliance with regulation is ordinarily assessed independently of the occurrence of harm, whereas compliance with the negligence rule is evaluated only if harm occurs. It is shown in a stylized model that because the use of the negligence rule is triggered by harm, the rule enjoys an intrinsic enforcement cost advantage over regulation. Moreover, this advantage suggests that the examination of behavior under the negligence rule should tend to be more detailed than under regulation (as it is).
Other Sources: http://ssrn.com/abstract=2144553
http://www.law.harvard.edu/programs/olin_center/papers/pdf/Shavell_731.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:32117118
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