The Challenge of Punitive Damages Mathematics

Viscusi, W. Kip

doi:10.2139/ssrn.256000

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The Challenge of Punitive Damages Mathematics

71 Pages Posted: 11 Jan 2001

See all articles by W. Kip Viscusi

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - College of Arts and Science - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

There are 2 versions of this paper

Date Written: December 2000

Abstract

Recent proposals to provide juries with specific numerical instructions for setting punitive damages should bring greater rationality to punitive damages awards. This approach is tested using evidence from 353 jury-eligible citizens who were asked to apply these formulas to a series of legal cases. Only a small minority of the respondents assessed the correct values of punitive damages from the standpoint of deterrence. Anchoring effects of appeals by a plaintiff's lawyer or media coverage of similar awards lead respondents to abandon the punitive damages formula and set punitive damages based on the anchor. Minorities and the less well-educated were particularly unwilling or unable to apply the recommended punitive damages formulas. Even with the aid of explicit mathematical formulas for setting punitive damages, jury awards for punitive damages are likely to remain highly variable and unpredictable.

JEL Classification: K13

Suggested Citation: Suggested Citation

Viscusi, W. Kip, The Challenge of Punitive Damages Mathematics (December 2000). Available at SSRN: https://ssrn.com/abstract=256000 or http://dx.doi.org/10.2139/ssrn.256000