Products Liability, Consumer Misperceptions, and Market Power

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Products Liability, Consumer Misperceptions, and Market Power

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A. Mitchell Polinsky
William P. Rogerson

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A. Mitchell Polinsky

Abstract

This article compares alternative liability rules for allocating losses from defective products when consumers underestimate these losses and producers may have some market power. If producers do not have any market power, the rule of strict liability is first-best. If market power is sufficiently large, a negligence rule is preferable. And if market power is even larger, the rule of no liability may be preferred.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 14 (1983)
Issue (Month): 2 (Autumn)
Pages: 581-589
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Handle: RePEc:rje:bellje:v:14:y:1983:i:autumn:p:581-589

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Paper
- A. Mitchell Polinsky & William P. Rogerson, 1982. "Products Liability, Consumer Misperceptions, and Market Power," NBER Working Papers 0937, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Marette, Stéphan, 2007. "Minimum Safety Standard, Consumers’ Information, and Competition (The)," Staff General Research Papers 12718, Iowa State University, Department of Economics. [Downloadable!]
Other versions:
- Stephan Marette, 2007. "Minimum Safety Standard, Consumers' Information, and Competition, The," Center for Agricultural and Rural Development (CARD) Publications 07-wp441, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
- Stephan Marette, 2007. "Minimum Safety Standard, Consumers' Information, and Competition, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 07-wp441, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University. [Downloadable!]
Andrew F. Daughety & Jennifer F. Reinganum, 2003. "Markets, Torts and Social Inefficiency," Working Papers 0308, Department of Economics, Vanderbilt University. [Downloadable!]
Other versions:
- Andrew F. Daughety & Jennifer F. Reinganum, 2006. "Markets, Torts, and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 37(2), pages 300-323, Summer.
Marette, Stèphan, 2005. "Regulatory Choice between a Label and a Minimum-Quality Standard, The," Staff General Research Papers 12486, Iowa State University, Department of Economics. [Downloadable!]
Other versions:
- Stephan Marette, 2005. "Regulatory Choice between a Label and a Minimum-Quality Standard, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 05-wp416, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University. [Downloadable!]
- Stephan Marette, 2005. "Regulatory Choice between a Label and a Minimum-Quality Standard, The," Center for Agricultural and Rural Development (CARD) Publications 05-wp416, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
Bruce Hay & Kathryn E. Spier, 2005. "Manufacturer Liability for Harms Caused by Consumers to Others," American Economic Review, American Economic Association, vol. 95(5), pages 1700-1711, December. [Downloadable!] (restricted)
Giuliana Palumbo & Elisabetta Iossa, 2002. "Lender liability in the Consumer Credit Market," Economics Working Papers (Ensaios Economicos da EPGE) 451, Graduate School of Economics, Getulio Vargas Foundation (Brazil). [Downloadable!]
Martin Gaynor & Deborah Haas-Wilson & William B. Vogt, 1998. "Are Invisible Hands Good Hands? Moral Hazard, Competition, and the Second Best in Health Care Markets," NBER Working Papers 6865, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Martin Gaynor & Deborah Haas-Wilson & William B. Vogt, 2000. "Are Invisible Hands Good Hands? Moral Hazard, Competition, and the Second-Best in Health Care Markets," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 992-1005, October. [Downloadable!] (restricted)
Tomas J. Philipson & Eric Sun, 2007. "Is the Food and Drug Administration Safe and Effective?," NBER Working Papers 13561, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Bruce Hay & Kathryn E. Spier, 2004. "Manufacturer Liability for Harms Caused by Consumers to Others," NBER Working Papers 10972, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

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