Jump to ContentJump to Main Navigation
Optional LawThe Structure of Legal Entitlements$
Users without a subscription are not able to see the full content.

Ian Ayres

Print publication date: 2005

Print ISBN-13: 9780226033464

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226033488.001.0001

Show Summary Details
Page of

PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 27 June 2022

Higher-Order Liability Rules

Higher-Order Liability Rules

Chapter:
(p.73) Chapter Five Higher-Order Liability Rules
Source:
Optional Law
Author(s):

Ian Ayres

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226033488.003.0005

This chapter analyzes higher-order liability rules that allow a series of reciprocal takings by the litigants. It shows that second-order liability rules (sometimes also referred to as “unconstrained dual-chooser” rules) can harness information of both litigants in more refined ways than either the single or dual-chooser rules. Indeed, if the takings are costlessly implemented, a sequence of reciprocal takings can mimic an auction that produces first-best allocative efficiency—even in the presence of asymmetric information. The chapter illustrates how courts can optimally tailor second- and higher-order damages, explains how one can view liability rules with reciprocal-takings options as forming a class of “internal” auctions, discusses the relative efficiency of second- and higher-order liability rules, and describes how to apply the “dispositive-takings principle” to optimally select damages. Finally, it provides an application of second-order rules to the problem of the efficient dispositive-takings principle.

Keywords:   higher-order liability rules, reciprocal takings, second-order liability rules, allocative efficiency, internal auctions, dispositive-takings principle, damages

Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.