The objective of this paper is to present a simple but flexible theoretical model of the adjudication process that can be used to derive implications of various hypotheses about the adjudicators and litigants for the trial win rates, appeal rates and the reversal rates. Such a model can serve as...

Multiple empirical studies find that juries/courts take account of potential harm in the determination of punitive damages. The received view in economic theory, however, is that punitive damages should not depend on potential harm. The purpose of this note is to provide an efficiency rationale...

We consider a monopoly market setup with legal error, where social welfare is negatively related to a firm's expected liability costs. In this context, we investigate the optimal location of the due-care standard vis-agrave;-vis any given desired care level. It is found that when both the...

The purpose of this paper is to explore the joint use of regulation and strict liability when firms can take care in both observable and unobservable dimensions and when the firm's conviction for damages is uncertain. Much of the literature concerning joint use regards management of the...