The idea with my framework is punitive damages would only be available to the extent that the most cost-effective risk mitigation measures that the AI system developer/deployer could have to taken to further reduce to likelihood and/or severity of the practically compensable harm would also tend to mitigate the uninsurable risk. I agree that there’s a potential Goodhart problem here, which the prospect of liability could give AI companies strong incentives to eliminate warning shots, without doing very much to mitigate the catastrophic risk. For this reason, I think it’s really important that the punitive damages formula put heavy weight on the elasticity of the particular practically compensable harm at issue with the associated uninsurable risk.
The idea with my framework is punitive damages would only be available to the extent that the most cost-effective risk mitigation measures that the AI system developer/deployer could have to taken to further reduce to likelihood and/or severity of the practically compensable harm would also tend to mitigate the uninsurable risk. I agree that there’s a potential Goodhart problem here, which the prospect of liability could give AI companies strong incentives to eliminate warning shots, without doing very much to mitigate the catastrophic risk. For this reason, I think it’s really important that the punitive damages formula put heavy weight on the elasticity of the particular practically compensable harm at issue with the associated uninsurable risk.