The Economics of Product Safety: A Rejoinder

Walter Oi

Bell Journal of Economics, 1974, vol. 5, issue 2, 689-695

Abstract: The model of the demand for a risky product (in the Spring 1973 issue of this Journal) has been criticized because it assumed perfect information. Goldberg contends that the implications of that model are wholly irrelevant for a world of imperfectly informed consumers. He further asserts that the model is incapable of relaxing the full information assumption. In this rejoinder, I first restate the salient features of the earlier model. The minimization of the sum of accident costs and accident prevention costs is surely the appropriate goal for public policy toward product safety, but this goal is largely ignored in Goldberg's comment. Contrary to his assertion, I show my model can easily be modified to analyze the implications of imperfect information within the context of product risks that can be described by one parameter. Some remarks are also offered on the costs and benefits of product bans as well as on directions for further research.

Date: 1974
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://links.jstor.org/sici?sici=0005-8556%2819742 ... O%3B2-U&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:bellje:v:5:y:1974:i:autumn:p:689-695

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().