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Consumer Choice and Corporate Bankruptcy

Samuel Antill & Megan Hunter

The Journal of Finance2026https://doi.org/10.1111/jofi.70030article
FT50UTD24AJG 4*ABDC A*
Weight
0.50

What the paper says

We estimate the indirect costs of corporate bankruptcy associated with lost customers. In incentivized experiments, randomly informing consumers about a firm's Chapter 11 reorganization lowers their willingness to pay for the firm's products by 17% to 28%. Consumers worry that bankruptcy could reduce product quality or prevent future interactions with the bankrupt firm. On average, 38% of consumers are aware of major bankruptcies. Using our experiments to estimate a structural model, we show that these indirect costs of bankruptcy amount to 12% to 15% of a firm's value. We show that these costs are unlikely to arise before bankruptcy.

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https://doi.org/https://doi.org/10.1111/jofi.70030

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@article{samuel2026,
  title        = {{Consumer Choice and Corporate Bankruptcy}},
  author       = {Samuel Antill & Megan Hunter},
  journal      = {The Journal of Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/jofi.70030},
}

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Consumer Choice and Corporate Bankruptcy

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.