Markets, torts, and social inefficiency

• 成果类型: Article
• 署名作者: Daughety, Andrew F.; Reinganum, Jennifer F.
• 署名单位: Vanderbilt University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2006.tb00017.x
• 发表日期: 2006
• 页码: 300-323
• 关键词: consumer misperceptions; imperfect information; STRICT LIABILITY; product-safety; QUALITY; LITIGATION; settlement; negligence; rules

摘要

We provide a model wherein oligopolists produce differentiated products that also have a safety attribute. Consumption of these products may lead to harm (to consumers and/or third parties), lawsuits, and compensation, either via settlement or trial. Firm-level costs reflect both safety investment and production activities, as well as liability-related costs. Compensation is incomplete, both because of inefficiencies in the bargaining process and (possibly) because of statutorily established limits on awards. We compare the market equilibrium safety effort and output levels to what a planner who is able to set safety standards, but takes the market equilibrium output as given, would choose.