Wednesday, 13 May 2015

Psychic harms and property rules

Get your photons off of my lawn!

Here's Steve Landsburg:
George Johnson of the New York Times writes that:
In a saner world, where science and the law meshed more precisely, a case like Firstenberg v. Monribot would have been dead on arrival in court.
Arthur Firstenberg, you see, is suing his neighbor, Raphaela Monribot, for bombarding him with photons from her iPhone, her WiFi connection, her dimmer switches and her fluorescent bulbs (all as side effects of her ordinary use of these devices). Mr. Firstenberg believes (or claims to believe) that said photons are damaging his health — a belief with essentially no scientific basis.

Mr. Firstenberg requests $1.43 million in damages, so perhaps we should think of this as an exercise in bosonic “ka-ching” theory. The case has gone on for five years, and might be headed to the New Mexico Supreme Court. Estimated court costs so far exceed a quarter of a million.
Psychic harms of this sort have been a problem for a while. How do we decide to allow photonic transgressions that cause psychic harms but not allow other transgressions that (in thought experiments) only cause psychic harms?

Here's David Friedman's resolution, from a couple years ago, to a prior Landsburg thought experiment:
More precisely, the property rule under which I have a right to read porn [EC: despite the psychic harm potentially imposed on prudes] and you can only stop me by offering to pay me not to do so produces its result by ignoring the cost my porn reading imposes on you, since, as with the case of risks imposed by careless driving, including that cost requires an unworkable contract between all of the prudes and all of the would-be consumers of porn. The property rule under which you have a right to forbid me, or anyone else, from reading porn, produces its result by ignoring the cost your ban imposes on me, for the same reason. Neither property rule gets the cost/benefit calculation correct, but the former rule is a great deal less expensive to enforce than the latter, which is an argument for it.

What about a liability rule? That is the point at which the subjective nature of the harm comes in. It is true that, from the standpoint of economics, all harm is ultimately subjective—having my arm broken or my car dented would not be a cost under sufficiently bizarre assumptions about my preferences. But some subjective costs are a lot easier to measure externally than others. When I claim damages for my wrecked car, there are market prices out there for repairing or replacing it that provide a court with a reasonable basis for estimating the cost. When I announce that your reading of porn, or oil drilling in a wilderness I never plan to visit, inflicts large psychic harm on me, there is no such basis for checking my claim.
The photon case should use a property right rule where I have the presumptive right to emit photons (though you can pay for abatement), because it's easy to fake psychic harms from photons and it's unverifiable.


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