How to share joint liability: A cooperative game approach

• We formalize the division of joint liability on the basis of causation and misconduct.
• We construct a transferable utility game based on the notion of potential damage.
• Acceptable judgments are core allocations, and the Shapley value is a fair compromise.
• Weighted values are acceptable judgments, and acceptable judgments reveal weights.
• The (symmetric) Shapley value is founded on axioms that are in line with tort law.

Sharing damage that has been caused jointly by several tortfeasors is analyzed from a normative point of view. We show how damage can be apportioned on two distinct bases: causation and degree of misconduct. Our analysis uses the concept of potential damage on the basis of which we define a transferable utility game. Its core defines acceptable judgments as allocations of the total damage against which no group of tortfeasors can object. We show that weighted Shapley values define acceptable judgments and, vice versa, acceptable judgments reveal weights. Our paper illustrates how the cooperative approach may bring useful insights into legal questions. In particular, the Shapley value appears of special interest, being founded on axioms that are in line with fundamental principles of tort law.