evaluating decisions, they should not impose liability for poor business judgment. …

This paper explores the impact of product liability on vertical product differentiation when product safety is … perfectly observable. In a two-stage competition, duopolistic firms are subject to strict liability and segment the market such … product is sold at a high price to consumers with high levels of harm. Firms’ expected liability payments are critically …

the firm's behavior. An experiment tests the theoretical predictions. In line with theory, Strict Liability and Negligence … firm to compensate potential victims. In contrast with theory, prevention rates absent liability are much higher and … liability is much less effective than predicted. -- Risk Regulation ; Liability Rules ; Incentives Insolvency ; Experiment …

We describe how product liability interacts with regulatory product approval in influencing a firm's incentives to … information acquisition incentives under both full and limited liability. We highlight efficiency inducing liability rules. …