The impact of changing liability standards on new product introduction /
| Main Author: | |
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| Other Authors: | , |
| Format: | Thesis Book |
| Language: | English |
| Published: |
1988.
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| Subjects: | |
| Online Access: | ProQuest, Abstract Link to OAKTrust copy |
| Abstract: | This dissertation analyzes the effect of the shifting liability burden on new product introductions. In particular, this dissertation examines the effects on the level of new product introduction and on the level of research and development activity of Henningsen and Greenman, two legal decisions that shifted liability from consumers to producers. The research question addressed is whether these court decisions negatively affected the levels of new product introduction and research and development activity. The analysis is conducted systematically. First, a theoretical model is developed of a profit-maximizing firm operating in a monopolistically competitive industry. Then, the effect of the shifting liability standard on new product introduction predicted by the theoretical model is empirically tested using secondary data aggregated at the industry-level. The results of the empirical analysis support the hypothesis that both the level of R&D expenditures and the level of new product introduction decrease as a result of increased producer liability. Further, the results also suggest that the impact of the liability change on new product introduction can be separated into a direct effect, reflecting changes in the costs of production (such as litigation and insurance) and an indirect effect, reflecting the impact of the liability change on new product introduction through the R&D process. However, the empirical evidence suggests that the decrease in new product introduction occurs mainly through the indirect effect. Any future work on the effects of liability standards should focus on improving the data at the firm level. |
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| Item Description: | Typescript (photocopy). Vita. "Major subject: Economics." |
| Physical Description: | x, 158 leaves : illustrations ; 29 cm |
| Bibliography: | Includes bibliographical references (leaves 130-133). |