Lando and Schweizer, ‘Causation and the Incentives of Multiple Injurers’

Under the but-for requirement of causation, a tort injurer cannot be held liable for more than the difference between the loss the victim would have suffered if the injurer had not been negligent, and the loss that is in reality suffered. We ask whether this causation requirement yields efficient precaution in the context of more than one injurer. Contrary to a widely accepted view, we find that incentives may be insufficient in that there may exist both an efficient and an inefficient Nash-equilibrium. We characterize when this may occur and compare those instances with precedent in which courts have not required but-for causation. Moreover, we ask whether alternative concepts of causation do better in terms of incentives. We find that, while both the NESS-test and the Shapley provide optimal incentives when injurers act simultaneously, there are reasons for considering the Shapley-value as the theoretically more satisfactory concept of causation.

Lando, Henrik and Schweizer, Urs, Causation and the Incentives of Multiple Injurers (November 4, 2020).

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