Product Liability Influences Incentives for Horizontal Mergers

Eric Langlais, Andreea Cosnita-Langlais and Tim Friehe

Working Papers from HAL

Abstract: This paper shows how product liability rules influence merger incentives. Consumers' misperception of product risk critically influences which liability rule induces the strongest merger incentives. When consumers overestimate product risk, merger incentives under negligence and strict liability are similar and weaker than under no liability. When consumers underestimate product risk, merger incentives under negligence are weaker than those under strict liability but stronger than those under no liability.

Keywords: Liability; Merger; Cournot; Market Structure (search for similar items in EconPapers)
Date: 2024
Note: View the original document on HAL open archive server: https://hal.science/hal-04516113
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Working Paper: Product Liability Influences Incentives for Horizontal Mergers (2024)
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