Abstract

The article characterizes the entry incentives provided by increases in product liability under various forms of competition. It is demonstrated that the entry of small, high-cost firms is likely to occur in imperfectly competitive markets when the average damage increases with industry output. Special cases are considered, including Cournot–Nash oligopoly and dominant firm-competitive fringe.

Disciplines

Economics

 

URL: http://digitalcommons.calpoly.edu/econ_fac/15