Table of Contents

Research Handbook on the Economics of Torts

Research Handbook on the Economics of Torts

Research Handbooks in Law and Economics series

Edited by Jennifer H. Arlen

This pioneering Handbook contains specially-commissioned chapters on tort law from leading experts in the field. This volume evaluates issues of vital importance to those seeking to understand and reform the tort law and the litigation process, taking a multi-disciplinary approach, including theoretical economic analysis, empirical analysis, socio-economic analysis, and behavioral analysis. Topics discussed include products liability, medical malpractice, causation, proximate cause, joint and several liability, class actions, mass torts, vicarious liability, settlement, damage rules, juries, tort reform, and potential alternatives to the tort system. Scholars, students, legal practitioners, regulators, and judges with an interest in tort law, litigation, damages, and reform will find this seminal Handbook an invaluable addition to their libraries.

Chapter 6: Fault lines in the positive economic analysis of tort law

Mark A. Geistfeld

Subjects: economics and finance, law and economics, law - academic, law and economics, law of obligations


Economists routinely engage in positive analysis to identify the efficiency properties of a practice without expressly taking any position on the normative question of whether the practice should be conducted in an efficient manner. Economists confidently do so, as Milton Friedman observed in his famous essay on this methodological approach, simply because “[t]he conclusions of positive economics seem to be, and are, immediately relevant to important normative problems, to questions of what ought to be done and how any given goal can be attained” (ibid.). Friedman was discussing problems of “economic policy,” illustrated by the issue of minimum-wage legislation (ibid., 5). Regard less of one’s position on what the minimum wage ought to be, no one seriously doubts that this matter of economic policy depends on the costs of regulation, such as increases in the unemployment rate. Merely identifying those costs and any resultant in efficiencies enables an economist to make an important contribution to wage-regulation policy without adopting any normative position about the matter.

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