Efforts to avoid punishment are socially wasteful. Not only do they limit the deterrent effect of punishment, but they may actually lead to the paradoxical result that more severe punishment for crime induces more crime. The law has therefore constantly attempted to deter avoidance efforts and...

The tax treatment of monetary sanctions and litigation expenditures varies across legal jurisdictions and time. The effects of these different tax regimes - particularly, on crime deterrence - have not been fully explored. Instead, legal intuitions in court decisions and legislative reforms are...

This paper suggests and justifies a revised formulation of the unilateral accident model based on relaxing two assumptions of the standard model: the precaution function and the harm function. The revised model is, therefore, more general and corresponds better to various situations. A resulting...

This paper explores the effects of public enforcement, in general, and punishment, in particular, on crime levels if offenders can engage in avoidance activities. Avoidance reduces the probability or magnitude of punishment. In general, offenders can reduce their expected punishment either by...

Many legal scholars believe that equity should be considered in designing legal rules. Kaplow and Shavell (1994) seriously challenged this approach. They proved that the tax transfer system is superior to legal rules in redistributing wealth. This paper reexamines their 'double distortion'...

This paper studies a unilateral accident model in which potentially judgment-proof agents (agents who may have insufficient assets to satisfy a judgment against them) choose levels of both monetary and nonmonetary care. We show that (i) monetary care may exceed its first-best level under both...

The economic literature on crime and law enforcement shows that the optimal level of deterrence increases when maximal fines rise. This paper shows that this view may be incorrect. In particular, if the gains from crime can be disgorged, as is usually the case in reality, then increasing the...

Standard economic analysis of tort law shows that the causation requirement does not affect the operation of the negligence rule in a perfect world, but does so in an imperfect world. While the standard analysis has focused exclusively on care models, this paper analyzes the impact of the...

We analyze liability rules in a setting where injurers are potentially insolvent and where negligence standards may deviate from the socially optimal level. We show that proportional liability, which sets the measure of damages equal to the harm multiplied by the probability that it was caused...