1. Law and Economics-Charles W. Upton Errors in Application

2. Tie Breakers Levels of Activity Errors in Application

3. Second Tie Breaker- Errors In the case of measuring x i * and x v *, courts have traditionally held to a “reasonable man” rule, defining these two variables in terms of the precautions a reasonable man would take.

4. Errors in Application Second Tie Breaker- Errors In the case of measuring x i * and x v *, courts have traditionally held to a “reasonable man” rule, defining these two variables in terms of the precautions a reasonable man would take. This rule is sometimes referred to as the Hand Rule, worked out by Judge Learned Hand, one of the most distinguished American Jurists of all time.

5. Errors in Application The Issue Courts Make Mistakes They Award the Wrong Amount of Damages They mis-estimate x i * and x v *

6. Errors in Application Types of Errors

7. Errors in Application Types of Errors

8. Errors in Application Types of Errors Sets Damages above the true economic damages

9. Errors in Application Types of Errors Makes an unbiased error in setting damages

10. Errors in Application Types of Errors

11. Errors in Application Types of Errors Sets damages above true economic damages

12. Errors in Application Types of Errors Sets standard of precaution too high

13. Errors in Application Types of Errors Makes errors in setting standards of precaution

14. Errors in Application Consequences

15. Errors in Application Consequences

16. Errors in Application Consequences

17. Errors in Application Consequences

18. Errors in Application Consequences

19. Errors in Application Consequences Suppose you know you make random errors in the legal standard. You might then favor a policy of strict liability over one of negligence.

20. Errors in Application Consequences Suppose you know you make random error in the legal standard. You might then favor a policy of strict liability over one of negligence. If you are stuck with vague standards, you can compensate for the errors in a negligence case by erring on the side of the defendant.

21. Errors in Application End ©2004 Charles W. Upton