Product Liability and Product Information- Accident Prevention by Product Liability Law if Information Provision of Producers and Information Search of Consumers is considered

Prof. Dr. Alfred Endres
Dipl.-Volkswirt A. Lüdeke
fördernde Einrichtungen:
German Research Foundation (DFG)


We consider the incentive effects of different rules of product liability law when both parties, the producer and the consumer, can take care to reduce accident risks (bilateral accidents). These incentive effects are analyzed given different assumptions about what the producer knows about the care of consumers and the consumer knows about the level of product safety chosen by the producer. In addition, we allow for misperceptions of consumers about product risks. In a dynamic setting the incentive effects of product liability law again are analyzed when reputation of producers can play a role, prices can be signals of product safety and information revelation of producers can be present. Then, in this modified setting we determine whether product liability law works as a substitute or a complement to the activities of producers to improve the information of consumers. Research on these topics continues and will be published in journal articles and a comprehensive textbook.

Forschungsschwerpunkt Umweltökonomie | 10.05.2024