Recently posted to SSRN:
"Beyond Liability: Correcting Optimism Bias Through Tort Law"
Queen's Law Journal, Vol. 35, No. 47, 2009Minnesota Legal Studies Research Paper No. 10-10
BARBARA LUPPI, Università degli studi di Modena e Reggio Emilia - Facolta di Economia
FRANCESCO PARISI, University of Minnesota - Law School
Due to their unrealistic optimism, people believe that risks are less likely to materialize for themselves than for others and hence inadequately react to legal threats and incentives such as tort liability. Optimism bias creates a distinctive problem in the design of tort rules, since it leads parties to assume excessive risks, in spite of the threat of liability, even when parties are provided accurate information about statistical facts. In this paper, we consider the opportunity to insulate the effects of optimism bias by exempting the parties from the liability due to optimism errors.
It takes some people years to gain an optimistic outlook, and now it's putting us at risk?
Posted by: Luany | 04/07/2010 at 04:22 PM