EclectEcon

Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, June 13, 2005

Tort Liability:
Who is the Least-Cost Preventer of the Accident?

From the NY Post ($ req'd)[thanks to BenS for the link]:

Abstract (Document Summary)
Staff at the front desk assured [Eileen Boulger] there would be nary a pinfeather in her seventh-floor room, but two days into her stay a maid accidentally replaced the hypoallergenic bedding with the life- threatening variety, according to Boulger's Manhattan lawyer, Ralph Drabkin.

This is a standard tort case: somebody goofed. The questions that need to be addressed involve expected types of loss, the expected sizes of the losses, and the probabilities involved. It all comes from the "Hand Formula", enunciated in Carroll Towing. The analysis is also well-explained in Posner's text, The Economic Analysis of Law.