ECONOMIC ANALYSIS OF LAW ON INDIVIDUAL BEHAVIOR：FEE SHIFTING RULE AND THE APPLICATION OF REPEAT OFFENDER

• Main Authors: Meng-Fei Hung, 洪萌馡
• Other Authors: Kong-Ping Chen
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/69984001544613403282

博士 === 國立臺北大學 === 經濟學系 === 98 === This thesis focuses the influence of law on people's behavior. Specifically speaking, the influence of litigation-fee shift on the welfare of prosecutors and defendants and the design of penalties for repeat offenders to raise their carefulness are discussed. Most literature, including Shavell (1982), demonstrate that the English rule (the losing side bears all costs) encourages people to file high merit suit and discourages low merit suit while comparing to the the American rule (each side bears its own costs). The high merit lawsuit is regarded as the case with high probability of prevailing. However, this conclusion is yielded based on the assumption of risk neutral. Therefore, there is a gap about whether it can still stand when players' risk attitude is considered. This paper shows that when the players are very risk averse, the discouragement of meritorious suits is greater under the English rule than under the American rule. Some high merit suits are filed only under the American rule. Besides, litigants are worse off in bearing risk under the English rule than under the American rule. Therefore, this paper claims that the American rule is better than the English rule in encouraging meritorious suits and reducing the litigant’s risk loss. Chapter 3 considers the case when there is legal error; the injurer can be too careless and there corresponds to a social loss due to misjudge. The legal error include misjudging innocent people as guilty or infringing ones, and misjudging the guilty and infringing people as guiltless. The former is called type-I error while the latter is called type-II error. This essay considers the design of penalties for repeat offenders to increase people's incentive for carefulness and calculates the optimal penalty scheme for repeat offenders under the balance of potential legal error. Our analysis shows that under negligence rule, when the type-I error cost is not significant; an uniform penalty scheme satisfies social optimum. When the type-I error cost is significant, an increasing penalty scheme satisfies social optimum. Under strict liability, for the incentive of potential injurer is consistent with social-cost minimum, the individual optimal carefulness is consistent with social optimum, therefore, the government does not need to raise penalty to increase people's carefulness.