Products liability, consumer misperceptions, and the allocation of consumers to firms

被引：4
|
作者：
Baumann, Florian [1 ]
Friehe, Tim [2 ,3 ]
机构：
[1] ZEW Leibniz Ctr European Econ Res, L 7,1, D-68161 Mannheim, Germany
[2] Univ Marburg, Publ Econ Grp, Plan 2, D-35037 Marburg, Germany
[3] CESifo, Munich, Germany
来源：
ECONOMICS LETTERS | 2021年 / 198卷
关键词：
Product liability; Product differentiation; Misperception of risk; Product safety; MARKETS;
D O I：
10.1016/j.econlet.2020.109658
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
This article shows that insulating market outcomes from consumers' misperceptions about product risk by compensating them fully for harm is not necessarily socially optimal. When firms offer products with different safety levels and consumers overestimate harm, incomplete compensation of product accident victims improves the allocation of consumers to firms. This effect can dominate the higher social costs arising from inefficient product safety levels. (C) 2020 Elsevier B.V. All rights reserved.
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页数：4
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