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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. Charreire, Maxime & Langlais, Eric, 2021. "Should environment be a concern for competition policy when firms face environmental liability?," International Review of Law and Economics, Elsevier, vol. 67(C).
    2. Cosnita-Langlais, Andreea & Langlais, Eric, 2024. "Environmental liability and product differentiation: Strict liability versus negligence revisited," International Review of Law and Economics, Elsevier, vol. 79(C).
    3. Cosnita-Langlais, Andreea & Friehe, Tim & Langlais, Eric, 2025. "Product liability influences incentives for horizontal mergers," International Review of Law and Economics, Elsevier, vol. 84(C).
    4. Eric Langlais & Andreea Cosnita-Langlais, 2022. "Incentives to differentiate under environmental liability laws : Product customization and precautionary effort," Working Papers hal-04159799, HAL.

    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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