ABSTRACT
Tort law is larger than the choice of liability rule. An economic account must explain such legal features as the reasonable person, causation, foresee ability, last clear chance, and assumption of risk, products liability, and intentional torts. This chapter discusses the economics of these doctrines. It addresses a mysterious question concerning the nature of tort liability. The chapter then tackles other vexing issues concerning the law and economics of tort. If the law-and-economics perspective on tortious behaviour is well founded, the tort system should presumably impose shadow prices on risky conduct. Economic analysis suggests that the law should impose a price schedule reflecting different accident's harms, thus leading potential injurers and victims to internalise the social cost of their conduct. The doctrine of assumption of risk has a clear economic function. Specifically, assumption of risk applies in unilateral accident scenarios in which the victim is the lowest cost avoider.
