The amount of monetary compensation a tortfeasor has to pay to the plaintiff(s) in a tort case when he is found liable.
Liability rules in tort law determine when a tortfeasor is liable. The rules of tort damages determine the amount the liable tortfeasor subsequently has to pay. Together these two bodies of law therefore determine in which situations the tortfeasor has to pay how many damages to the plaintiff(s). Therefore, the behavioral incentives provided by tort law depend on both sets of rules. In this entry, the most important insights from the economic analysis of tort damages are presented. The limited space does not allow a full discussion of all possible complications (see Visscher 2009for a more complete overview), but where relevant such complications are briefly indicated. It is also not possible to include a full discussion of the liability rules themselves, but in the remainder of this introduction, a very brief account of this topic is...
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