Document Type
Working Paper
Publication Date
7-23-2013
SSRN Discipline
Economics Research Network; Legal Scholarship Network; Social Insurance Research Network; Experimental & Empirical Studies eJournals; Law School Research Papers - Legal Studies; LSN Subject Matter eJournals; Financial Economics Network; Political Science Network; Law School Research Papers - Law & Economics
Abstract
The distribution of blockbuster punitive damages awards has fat tails similar to the distributions of losses from natural disasters Extremely large awards occur more often and are more difficult to predict than if blockbuster awards were distributed normally The size and predictability of awards are important factors in the US Supreme Court's decisions on punitive damages This article examines the effect of the Court's decision in iState Farm v Campbelli on blockbuster punitive damages awards iState Farmi shifts the fat tail of the distribution of blockbuster awards down or "thins" the tail which is consistent with a restraining effect on award size iState Farmi reduces the size of blockbuster awards in general but this reduction is most salient in the upper half of the distribution of awards iState Farmi also has a negative influence on the probability of exceeding a single digit ratio between punitive and compensatory damages This article also examines the largest awards and considers why defendants may not pay large punitive damages awards
Recommended Citation
W. Viscusi & Benjamin J. McMichael,
Shifting the Fat-Tailed Distribution of Blockbuster Punitive Damages Awards,
(2013).
Available at:
https://scholarship.law.ua.edu/fac_working_papers/146