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Dynamic Games and Applications Seminar

Smart Products: Liability, Investments in Product Safety, and the Timing of Market Introduction


Feb 10, 2022   11:00 AM — 12:00 PM

Herbert Dawid Bielefeld University, Germany

Herbert Dawid

Presentation on YouTube

We analyze the role of product liability for the emergence and development of smart products such as autonomous vehicles (AVs). We develop, and calibrate to the U.S. car market, a dynamic model where a (monopolistic) innovator chooses safety stock investments, the timing of market introduction, and the product price. Inducing higher long-term product safety through a strict (partial) liability rule reduces short-term safety investments and slows down AV market penetration. By contrast, negligence-based liability fosters initial investments without hampering long-term product safety. However, too stringent liability might forestall investments in the development of AVs and their market introduction.

(with and Gerd Muehlheusser)

Georges Zaccour organizer
Jafar Chaab organizer


Online meeting
Montréal Québec

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