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Market collusion with joint harm and liability sharing

Author

Listed:
  • Florian Baumann
  • Maxime Charreire

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Andreea Cosnita-Langlais

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

When it is impossible to identify ex post the producer of a product causing harm, or the damage caused is indivisible although caused by multiple injurers, courts must apportion the total damage among tort-feasors. In this model we examine how such liability sharing rules affect the likelihood of tacit collusion. For this we use a standard Cournot oligopoly model where firms are collectively held liable for joint harm inflicted on third parties. With repeated market interaction and grim strategies, we investigate the sustainability of collusion to derive some policy implications

Suggested Citation

  • Florian Baumann & Maxime Charreire & Andreea Cosnita-Langlais, 2020. "Market collusion with joint harm and liability sharing," Post-Print hal-02427376, HAL.
    • Handle: RePEc:hal:journl:hal-02427376
    DOI: 10.1016/j.irle.2019.105885
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    Cited by:

    1. Eric Langlais & Andreea Cosnita-Langlais, 2022. "Incentives to differentiate under environmental liability laws : Product customization and precautionary effort," EconomiX Working Papers 2022-20, University of Paris Nanterre, EconomiX.
    2. Eric Langlais & Maxime Charreire, 2020. "Should environment be a concern for competition policy when firms face environmental liability ?," EconomiX Working Papers 2020-25, University of Paris Nanterre, EconomiX.
    3. Maxime Charreire & Eric Langlais, 2021. "Should environment be a concern for competition policy when firms face environmental liability ?," Post-Print hal-03208691, HAL.

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    More about this item

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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