Comparative Vigilance

A growing body of literature suggests that courts and juries are inclined toward division of liability between two strictly non-negligent or “vigilant†parties. However, standard models of liability rules do not provide for vigilance-based sharing of liability. In this paper, we explore the economic efficiency of liability rules based on comparative vigilance. We devise rules that are efficient and that reward vigilance. It is commonly believed that discontinuous liability shares are necessary for efficiency. However we develop a liability rule, which we call the “super-symmetric rule,†that is both efficient and continuous, that is based on comparative negligence when both parties are negligent and on comparative vigilance when both parties are vigilant, and that is always responsive to increased care. Moreover, our super-symmetric rule divides accident losses into two parts: one part creates incentives for efficiency; the other part provides equity. [Working Paper No. 173]