Assaf Jacob

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Volume 89.5
An Information-Production Theory of Liability Rules
Assaf Jacob
Harry Radzyner Law School, Reichman University (IDC)
Roy Shapira
Harry Radzyner Law School, Reichman University (IDC)

We thank Ronen Avraham, Shahar Dillbary, Avihay Dorfman, Ehud Guttel, Alon Harel, Yotam Kaplan, Dan Klerman, Steve Shavell, and Alfred Yen for helpful comments, and Yael Amiel, Tal Elmakaiess and Talya Yosphe for excellent research assistance.

tandard economic analysis views strict liability as preferable to negligence because it is easier to administer and leads to better risk reduction: strict liability induces injurers not only to optimally invest in precaution but also to optimally adjust their activity levels. Standard analysis thus views the prevalence of negligence as unjustifiable on efficiency grounds. This Article challenges the conventional wisdom and clarifies an efficiency rationale for negligence by spotlighting the information-production function of tort law.