Economic analysis has long been employed for the study of tort liability. This paper revisits the main contributions to the subject emphasizing the inherent impossibility for tort liability to set perfectly efficient first-best incentives to take precaution for all parties to an accident and the...

In ancient societies, rules of communal responsibility permitted the imposition of retaliatory sanctions on a wrongdoer’s clan. These rules followed the collective ownership structure of early communities. Over time, notions of personal responsibility emerged, terminating the transfer of...

Shavell (1980) established that all existing tort regimes fail to incentivize optimal activity levels. The bearer of residual loss adopts a socially optimal activity level, however the non-bearer of residual loss will adopt an excessive level of activity. In this paper, we explore alternative...