Efficient incentives from obligation law and the compensation principle

摘要

The compensation principle provides an analytical link between the requirement to compensate for deviations from legal or contractual obligations and the economic desideratum of rules providing efficient incentives. Quantifying damages suitably in line with the difference hypothesis, even relative to an inefficient obligation profile, would ensure the compensating goal being achieved as required for the compensation principle. The paper applies this insight to various settings from tort and contract law, leading to new results but also to a unifying perspective on findings from the existing literature. (C) 2015 Elsevier Inc. All rights reserved.