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The (Legal) Value of Chance: Distorted Measures of Recovery in Private Law

dc.contributor.authorMikos, Robert A.
dc.contributor.authorBen-Shahar, Omri
dc.identifier.citation7 Am. Law Econ. Rev. 484 (2005)en_US
dc.description.abstractParties who make investments that generate externalities may sometimes recover from the beneficiaries, even in the absence of contract. Previous scholarship has shown that granting recovery, based on either the cost of reasonable investment or the benefit conferred, can provide optimal incentives to invest. This article demonstrates that the law often awards recovery that is neither purely cost-based nor purely benefit-based and instead equals either the greater or lesser of the two measures. These hybrid approaches to recovery distort compensation and incentives. The article demonstrates the surprising prevalence of these practices and explores informational and institutional reasons why they emerge.en_US
dc.format.extent1 PDF (52 pages)en_US
dc.publisherAmerican Law and Economics Reviewen_US
dc.subject.lcshObligations (Law) -- United Statesen_US
dc.subject.lcshRestitution -- United Statesen_US
dc.titleThe (Legal) Value of Chance: Distorted Measures of Recovery in Private Lawen_US

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