Lawyers, judges, and scholars have long debated whether incentives in
tort, contract, and restitution law effectively promote the welfare of
society. If these incentives were ideal, tort law would reduce the cost
and frequency of accidents, contract law would lubricate transactions,
and restitution law would encourage people to benefit others.
Unfortunately, the incentives in these laws lead to too many injuries,
too little contractual cooperation, and too few unrequested benefits.
Getting Incentives Right explains how law might better serve the social
good.In tort law, Robert Cooter and Ariel Porat propose that all
foreseeable risks should be included when setting standards of care and
awarding damages. Failure to do so causes accidents that better legal
incentives would avoid. In contract law, they show that making a promise
often causes the person who receives it to change behavior and undermine
the cooperation between the parties. They recommend several solutions,
including a
novel contract called "anti-insurance." In restitution law, people who
convey unrequested benefits to others are seldom entitled to
compensation. Restitution law should compensate them more than it
currently does, so that they will provide more unrequested benefits. In
these three areas of law, Getting Incentives Right demonstrates that
better law can promote the well-being of people by providing better
incentives for the private regulation of conduct.
