ABSTRACT
Civil juries are asked to make award decisions regarding compensatory (economic, pain and suffering) and punitive damages. Economic and pain and suffering awards are intended to restore the plaintiff to a prior level of functioning, whereas punitive damages are intended to punish the defendant and deter similar conduct in the future. Metrics for assigning monetary values to economic damages are often provided by an expert economist. However, assigning monetary values to pain and suffering and to punitive damages typically involves considerable uncertainty; that is, there are few, if any, helpful metrics for deciding appropriate award amounts. This chapter summarizes decision-making research in the area of compensatory and punitive damages, with particular emphasis on biases in such decisions and attempts to reduce award magnitude and variability. Issues such as “leakage” (the interdependence of awards in different categories) and decision heuristics (such as “anchoring”) are discussed.
