Harm-Benefit Interactions

Abstract

We analyze a distinct category of cases—Harm–Benefit cases—in which harm to the victim is accompanied by benefit to the injurer. While liability should be imposed when the benefit exceeds the harm, the case for liability becomes weaker when the harm is larger than the benefit. Therefore, it is often more important to impose liability on the non-negligent injurer than on the negligent injurer. We study the incentive effects of different liability rules, as well as the restitution rule. Our analysis also sheds new light on the law of takings. And it applies in certain contractual settings.