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On consumer preferences for (partial) products liability

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  • Friehe, Tim
  • Langlais, Eric
  • Schulte, Elisabeth

Abstract

Traditional law and economics analyses of products liability find that different liability regimes lead to the same market outcome, implying that risk-neutral consumers are indifferent between products liability and no products liability. We present a setup in which a group of consumers supports the implementation of products liability although its enforcement is costly. All consumers may prefer the same level of (partial) products liability.

Suggested Citation

  • Friehe, Tim & Langlais, Eric & Schulte, Elisabeth, 2018. "On consumer preferences for (partial) products liability," Economics Letters, Elsevier, vol. 173(C), pages 128-130.
    • Handle: RePEc:eee:ecolet:v:173:y:2018:i:c:p:128-130
    DOI: 10.1016/j.econlet.2018.10.006
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    References listed on IDEAS

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    1. Andrew F. Daughety & Jennifer F. Reinganum, 2018. "Market structure, liability, and product safety," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 9, pages 225-247, Edward Elgar Publishing.
    2. Rubin, Paul H & Bailey, Martin J, 1994. "The Role of Lawyers in Changing the Law," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 807-831, June.
    3. Osborne, Evan, 2002. "What's Yours is Mine: Rent-Seeking and the Common Law," Public Choice, Springer, vol. 111(3-4), pages 399-415, June.
    4. Marini, Marco A. & Corchon, Luis, 2016. "Handbook of Game Theory and Industrial Organization: An Introduction," MPRA Paper 77169, University Library of Munich, Germany.
    5. Epstein, Richard A, 1988. "The Political Economy of Product Liability Reform," American Economic Review, American Economic Association, vol. 78(2), pages 311-315, May.
    6. Paul Rubin, 2005. "Public choice and tort reform," Public Choice, Springer, vol. 124(1), pages 223-236, July.
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    Cited by:

    1. Tim Friehe & Eric Langlais & Elisabeth Schulte, 2022. "Firm Liability When Third Parties and Consumers Incur Cumulative Harm," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(1), pages 53-71, January.

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    More about this item

    Keywords

    Product liability; Political economy;

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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