This paper compares alternative liability rules for allocating losses from defective products when consumers under- estimate these losses and producers may have some market power. If producers do not have any market power, the rule of strict liability .leads to both the first-best accident...

This article compares alternative liability rules for allocating losses from defective products when consumers underestimate these losses and producers may have some market power. If producers do not have any market power, the rule of strict liability is first-best. If market power is...

This paper compares alternative liability rules for allocating losses from defective products when consumers under- estimate these losses and producers may have some market power. If producers do not have any market power, the rule of strict liability .leads to both the first-best accident...