Henrik Lando (Copenhagen Business School)
Optimal negligence standards when one party is ignorant of the standards
This article analyzes optimal negligence standards for the injurer and the victim in tort cases when the injurer but not the victim has an incentive to become informed about negligence standards. Negligence standards should then be set with a view to affecting only the injurer’s behavior. Whether the standard applied to the injurer should then be higher than under full information depends on the victim’s beliefs about the standard demanded of him or her, and
on whether care levels of the injurer and the victim are substitutes or complements. Strict liability is optimal under one-sided legal ignorance.
More information and download paper on the ACLE website.