One project that I’m working on (but haven’t written up yet) is about using liability rules to reward socially useful behavior. The law is replete with civil and criminal sanctions against wrongful conduct. Public policy is also enthusiastic about using property rights to encourage innovation or investment. Less attention, though, is given to what I call “rewards” for positive action.
Consider the concept of salvage in admiralty. Salvage is a liability rule that gives a vessel a claim against another vessel for a reward (determined ex post by a court) when a successful rescue is made. This is more effective than imposing an affirmative duty on vessels to help others and sanctioning them if they do not, largely because the enforcement costs of such a duty would be prohibitive. Likewise, there is no property rule that can achieve the worthy objective of preventing ships or their cargo from sinking once they are in distress. Other rewards are set ex ante by an administrative body and tailored to a particular issue. For example, the police often offer rewards for information leading to the arrest of a suspect. This is better than threatening people with accomplice liability.