March 26, 2014

July 1993 - The Expert and the Tooth Fairy

From Robinson C. Ramsey of Wharton, this excerpt from the deposition of an economist - taken by Darryl Carter of Houston (Soules & Walace).

Q. Well, let me ask you this: You've determined that in your best judgment to fully compensate Mr. White for the present value of his future loss of projected earning capacity, Mr. White would have to be paid approximately $123,000 in cash today, true?

A. Yes.

Q. Now, if the tooth fairy flitted into the room and increased that number by 25 percent and sprinkled that additional $35,000 on Mr. White as additional compensation for the present value of his projected future lost earning capacity, then according to your model and your calculations that additional $30,000 would be overcompensation to Mr. White, wouldn't it?

A. If the tooth fairy gave him an extra $30,000 .... If the tooth fairy did it, then that would certainly make him re-evaluate his belief in the tooth fair.