Daughety, Andrew F.; Reinganum, Jennifer F. - In: Journal of Institutional and Theoretical Economics (JITE) 164 (2008) 1, pp. 106-126
We examine the behavior of a firm that produces a product with a privately-observed safety attribute. Costly disclosure and price-signaling of safety are alternative firm strategies. The liability system and production cost determine the firm's full marginal cost. When the firm's full marginal...
