> If the max cost of predatory practices isn't much higher than the gain from using them in the rare cases when caught, it creates an incentive to use such practices.
This isn't a complete economic argument in favor of companies behaving poorly. Punitive damages pale in comparison to a threat of loss of future business dealings as a result of poor behavior.
Japan, for instance, prohibits punitive damages. Is there any suggestion on your part that companies there are somehow more "predatory" than ones here in the US?
>Punitive damages pale in comparison to a threat of loss of future business dealings as a result of poor behavior.
That fully depends upon how you simulate humans in one's argument. For a generally rational generally well informed human this is likely true (note I'm not even going with the 'fully rational fully informed'). But for the majority of consumers, there is less cost and there are ways to reduce the cost further. There will be some impact when the news breaks (if it breaks, the story being publicly available is a world of difference from the story being CNN/Fox New's headline of the day), but people will quickly lose interest or otherwise stop caring. While punitive damages may not be enough to fix the issue, I think there is an issue and I think the issue would be worse without them.
This isn't a complete economic argument in favor of companies behaving poorly. Punitive damages pale in comparison to a threat of loss of future business dealings as a result of poor behavior.
Japan, for instance, prohibits punitive damages. Is there any suggestion on your part that companies there are somehow more "predatory" than ones here in the US?
https://en.wikipedia.org/wiki/Punitive_damages#Japan