Switching consumers and product liability : on the optimality of incomplete strict liability

Florian Baumann, Tim Friehe and Kristoffel Grechenig

This article shows that it may be socially optimal to grant accident victims less than full compensation. In our framework, firms are liable under product liability but also invest in care to prevent consumers switching to competitors. Affecting the partition of consumers by means of care-taking is not desirable from a social standpoint. Consequently, it may be optimal to reduce liability below full compensation in order to adjust firms’ care incentives.

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Year of publication:	2010
Authors:	Baumann, Florian ; Friehe, Tim ; Grechenig, Kristoffel
Publisher:	St. Gallen : Univ. of St. Gallen Law School
Subject:	Tort law \| Product liability \| Care level \| Asymmetric information \| Switching \| Produkthaftung \| Beziehungsmarketing \| Relationship marketing \| Konsumentenverhalten \| Consumer behaviour \| Wechselverhalten \| Switching behaviour \| Asymmetrische Information \| Theorie \| Theory

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Extent:	Online-Ressource (PDF-Datei: 14 S., 173,43 KB)
Series:	Law and economics research paper series. - Sankt Gallen, ZDB-ID 2532394-5. Working paper / University of St. Gallen Law School ; 2010,01
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
Classification:	K13 - Tort Law and Product Liability
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10003917064