American Law and Economics Review V4 N2 2002 (258-294)
© 2002 American Law and Economics Association
Article |
No-Fault for Motor Vehicles: An Economic Analysis
Yu-Ping Liao, National Cheng-chi University, and Michelle J. White, University of California, San Diego
Send correspondence to: Michelle J. White, Professor of Economics, University of California, San Diego, La Jolla, CA 92093-0508; Fax: (858) 534-7040; E-mail: miwhite{at}ucsd.edu.
Abstract
This article compares incentives and efficiency under the pure tort system (the comparative negligence rule) to those under pure and mixed no-fault systems. Under no-fault systems, drivers are allowed to opt out of no-fault and file lawsuits if their damages exceed a certain threshold. We find that no single liability system always dominates on efficiency grounds, but the pure tort system does best when costs of care are low, and pure no-fault does best when costs of care are high. Choice systems, in which drivers choose between no-fault or pure tort systems, lead to less efficient results because drivers choose the pure tort rule too often.
![]()
CiteULike
Connotea
Del.icio.us What's this?
This article has been cited by other articles:
![]() |
A. M. Feldman and R. Singh Comparative Vigilance Am. Law Econ. Rev., March 5, 2009; (2009) ahp001v1. [Abstract] [Full Text] [PDF] |
||||
