Does a Returning Brand Bring Back Bad Memories? An Empirical Model and Analysis of Firms’ Reentry Strategy post a Product-Harm Crisis

This article proposes and estimates an empirical model for firms’ reentry timing strategy after a product recall following a product-harm crisis. Specifically, it looks into whether and how consumers discount negative information differently before and after the reentry of the recalled product and how the evolution of consumer preference affects a firm’s decision on when to reenter the market. Counterfactual analysis based on the estimation results is conducted and implications on crisis management for firms are generated.