Efficiency Effects of Punitive Damages.

This paper develops a typology of different behaviors that might be viewed as outrageous by a jury and subjected to punitive damages. The paper derives the level of punitive damages for achieving economic efficiency in four different situation - malice and three settings where a jury might find reckless disregard - a rational response to insufficient compensatory damages, a nonrational disregard to risk, and a rational response when compensatory damages are adequate.