Efficient Allocation
As A legal Goal
People
typically engage in activities that impose a risk of harm on others-- Driving
cars, operating apartment buildings, and storing information online, for
example. If the activity causes harm,
the law will, in certain cases, make the person engaging in that activity
liable for the harm.
The law
imposes liability for a variety of purposes, and the purposes may vary from
case to case. One of the purposes for
which the law sometimes imposes liability it to provide people engaging in a
certain activity with an incentive to take efficient
precautions against the occurrence of certain harms.
This
tutorial has two goals. The first is to
explain the concept of efficient precautions.
The second is to explain why the law sometimes imposes liability in
order to provide people engaging in an activity with an incentive to take
efficient precautions against the occurrence harms.