The central hypothesis of this article is that liability regulation can foster firms' incentives to study the (potential) dangers of their products. We discuss alternative views and develop a formal model to analyze a firm's incentive structure under the application of hindsight liability. We...

Rapid economic development and population growth in Bangladesh have fostered significant advancements and opportunities for its citizens. Alongside these positive changes, however, there has been a notable increase in per capita plastic consumption, leading to a pressing need for effective...

The central hypothesis of this article is that liability regulation can foster firms' incentives to study the (potential) dangers of their products. We discuss alternative views and develop a formal model to analyze a firm's incentive structure under the application of hindsight liability. We...

The EU's Product Liability Directive (PLD) determines the rules for strict product liability in the EU. It establishes a framework in which manufacturers' liability is determined solely based on the presence of defects in the product, regardless of the manufacturer's fault. The PLD is intended...

Consumers have legal recourse under product liability law for any damages or losses caused by faulty products. Faulty goods have an adverse effect on millions of individuals worldwide, and the sellers or producers end up shelling out a sizable sum for products-liability insurance as well as...

This paper explores whether platform liability should be strict or negligence based. In the model, two-sided platforms get revenue from two sources: selling products or services to consumers and selling advertising (or information) to others. There are indirect network effects: higher consumer...

The 1985 Product Liability Directive (PLD) is currently being revised, with a view to adapting European Union product liability rules to the digital economy and new technologies. The ongoing discussion focuses on technical issues and apparently takes it for granted that the PLD as it stands...

In the debate on international waste trade, the focus on resource efficiency and recycling has gradually begun to accompany the focus on negative environmental externalities. In this context, we examine the impact of Extended Producer Responsibility (EPR) on the export of waste batteries (WB)....

The EU Product Safety Award encourages and honours innovative business initiatives and research that make a difference for consumers. It's for those who put safety at the heart of what they do, setting an example that can inspire others.

The EU's Product Liability Directive (PLD) determines the rules for strict product liability in the EU. It establishes a framework in which manufacturers' liability is determined solely based on the presence of defects in the product, regardless of the manufacturer's fault. The PLD is intended...

When a multimarket firm's product causes harm to consumers, should the firm bear uniform or variable liability across markets? We analyze a two-market model, in which under the variable rule the firm's liability rises above the standard level in market 1 but falls below it in market 2, while...

This study examines the association between product recall and CEO compensation. Using a sample of U.S. automobile industry product recalls from 1999 to 2018, we find that product recalls have significant negative impacts on CEO compensation. Our findings hold after controlling for the common...

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 theoretically analyzes the effects of the platform liability for the third-party products on incentives of the third-party vendors to make efforts to produce safe products. For this purpose, I suppose that the platform behaves as a mere marketplace and does not screen vendors or...

We analyze how the precision of a firm’s product safety testing affects its pricing strategies and the associated profit implications under strict product liability with a partial liability specification. We consider a signaling game where a firm with private product safety information chooses...

Organic consumption is driven by an identity-based motivation to take care of personal well-being, local communities, and the environment. However, market constraints such as premium price or a lack of assortment restrict the purchase behavior of organic consumers, while little is known about...

When a product recall is announced, the manufacturer’s stock investors estimate the costs of the recall to determine how much to penalize the firm’s stock price. Prior event studies have viewed these costs as manifest only in the downstream consumer market. We reason that this view is...

Adverse events, such as product recalls, transcend business-to-business (B2B) secondary markets (i.e., used product markets). Yet, little, if any, is known about the impact of such adverse events on purchase responses of B2B buyers (i.e., channel intermediaries). The current study addresses this...

Medical device firms operate at the frontiers of innovation. When functioning properly, innovative medical devices can prolong and improve lives; when malfunctioning, the same devices may harm patients and lead to product recalls. Product recalls create significant challenges for firms, but...