Helena Perrone How Do Consumers React To A Product Harm Crisis?
University of Mannheim (Universität Mannheim)Mannheim, Germany
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The Collaborative Research Center (CRC) TR 224 – EPoS
The Collaborative Research Center (CRC) TR 224 – EPoS is a cooperation between the University of Bonn and the University of Mannheim. Funded by the German Research Foundation (DFG), it aims to analyze and provide policy proposals that address three key societal challenges: how to promote equality of opportunity; how to regulate markets in light of the internationalization and digitalization of economic activity; and how to safeguard the stability of the financial system.
When it is highly publicized that a product is defective, contaminated or harmful, this is known as a product harm crisis. In this video HELENA PERRONE explores how consumers react to such an event. Focusing on the French “mad cow” crisis which began in 2000 and combining a theoretical model with a comprehensive dataset, Perrone finds that small drops in sales in response to such a crisis can conceal consumers’ real feelings about a product. Demonstrating that the substitutability of a product plays a key role, Perrone suggests ways in which both firms and governments can respond more effectively.
LT Video Publication DOI: https://doi.org/10.21036/LTPUB101023
Consumers' Costly Responses to Product Harm Crises
- Rosa Ferrer and Helena Perrone
- Available at SSRN 2777569
- Published in 2016