Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162665
Authors: 
Friehe, Tim
Schulte, Elisabeth
Year of Publication: 
2017
Series/Report no.: 
Joint Discussion Paper Series in Economics 19-2017
Abstract: 
We describe how product liability interacts with regulatory product approval in influencing a firm's incentives to acquire information about product risk, using a very parsimonious model. The firm may have insufficient information acquisition incentives when it is not fully liable for the harm caused by its product. The firm may also have excessive information acquisition incentives under both full and limited liability. We highlight efficiency inducing liability rules.
Subjects: 
Innovation
Product Liability
Uncertainty
JEL: 
K13
O31
D83
Document Type: 
Working Paper

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