Market entry and product liability
研究产品责任制度如何影响企业进入决策，发现当消费者高估产品风险且未获充分赔偿时，市场进入可能不足；严格责任制度在进入内生时是社会最优的。
Cournot competition with fixed entry costs can lead to excessive market entry. We examine how product liability regimes influence firm entry decisions within a framework where consumers may misperceive product risk. We demonstrate that market entry can be insufficient when consumers overestimate product risk and are not fully compensated for their losses. Furthermore, our analysis reveals that endogenous entry eliminates the “output effect,” a mechanism commonly invoked in models with a fixed number of firms to establish that a no-liability regime can be socially optimal. Our findings suggest that Strict Liability with full compensation for consumer losses is socially optimal in Cournot markets with endogenous entry.