ECO320H1 Lecture Notes - Lecture 6: Contributory Negligence, Risk Neutral, Externality
Document Summary
Would an effectively enforced law requiring drivers to wear seatbelts reduce driver or pedestrian deaths: drivers who wore seat belts would feel safer than before, and might take a little less care to avoid accidents. While such drivers would probably still remain safer overall. Courts traditionally allow jury"s to come up with their own numbers, due to subjectivity, used in usa. In canada, there are caps on what you can claim on suffering. The jury doesn"t have open ended authority to give any number. The curve slopes upward again, because even if you"re taking extra precaution, it costs more to take this precaution which cost you more. The efficient point is the lowest point on the tc curve. (the curve is the same mc cost curve in a competitive market). The simple negligence rule requires the victim be compensated by the injuror provided if and only if the injuror is at fault an answer to the paradox of compensation.
