Abstract
AbstractTort models assume symmetry in the behavior of injurers and victims when faced by a threat of liability and a risk of harm without compensation, respectively. This assumption has never been empirically validated. Using a novel experimental design, we study the behavior of injurers and victims when facing symmetric accident risks. Experimental results provide qualified support for the symmetric behavior hypothesis.
Highlights
Economic models of tort law assign specific roles to the parties in an accident, namely injurers or victims
Similar results hold if comparing injurers and victims’ precaution investments in each stage and each period, and they are robust to tests for the equivalence of means within a symmetric equivalence interval using a two one-sided t-test approach (Dinno 2017; Schuirmann 1987)
Our results provide qualified support for the symmetric behavior hypothesis, laying empirical foundations for the prediction generated by the economic models of tort law
Summary
Economic models of tort law assign specific roles to the parties in an accident, namely injurers or victims. These two parties are conventionally assumed to be unacquainted, risk-neutral, identical in that they both maximize expected utility, and free from any behavioral bias. Given these assumptions, tort theory predicts that injurers and victims would exhibit symmetric behavior – i.e. the same investments on accident prevention – when facing symmetric accident risks (Brown 1973; Shavell 1980, 1987).
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