Punitive Damages and Deterrence of Efficiency-Promoting Analysis

A Problem Without a Solution?

by Steven Garber

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In this article, the author comments on Professor Viscusi’s analysis regarding a threat that punitive damages pose to economic efficiency (see Viscusi, Kip W., “Corporate Risk Analysis: A Reckless Act?,” Stanford Law Review, Vol. 52, No. 3). The author discusses Viscusi’s implicit assumption that promotion of economic efficiency is the only legitimate social goal of punitive damages, and comments on the strength of Viscusi’s historical evidence that punitive damages are often assessed because companies perform risk or cost-benefit analysis. The author also sketches a theory of why the threat of such assessments is likely to deter socially worthwhile analysis in many cases and comments on potential policy responses.

Originally published in: Stanford Law Review, v. 52, no. 6. July 2000, pp. 1809-1820.

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