Should consumers be punished when a firm makes a mistake?

If a car is made incorrectly and it becomes a safety hazard who is liable for getting it fixed. The car needs to be fixed and manufacturers are responsible for making those repairs (free of charge to the consumer) but what if the consumer doesn’t want to get the car fixed. Getting your car fixed is time consuming. You have to schedule time to bring it in, wait while it’s being repaired, and in some cases have no car for days while the repairs are made. It’s not something consumers enjoy doing so many avoid having their car fixed when a recall occurs. The result is that there are potentially dangerous cars on the road because consumers don’t want to get them fixed. Should consumers be punished if they don’t bring their cars in for repairs? In Britain consumers can have their cars impounded if the repairs aren’t made, in the U.S consumers can’t be punished if they choose not to bring their cars in for repairs. In a paper I co-authored with Hair Bapuji (U Melbourne), we found that when consumers can be punished it compels firms to issue a recall faster and avoid bigger problems. The paper is forthcoming in the Journal of International Business Policy, 2024-02-09 Consumer Liability and Responsiveness – JIBP – Accepted Manuscript

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