Products Liability and Monopoly in a Contestable Market, Economica
Sustainable monopoly prices, outputs and producer care are examined in a contestable market setting under alternative liability rules. The market attains a second-best optimum under strict liability, negligence and no liability. The threat of entry is thus sufficient for a monopoly to supply second-best optimal product quality.
Spulber, Daniel. 1988. Products Liability and Monopoly in a Contestable Market. Economica. 55(219): 333-341.