Consumer Choice and Corporate Bankruptcy

89 Pages Posted: 8 Jul 2021 Last revised: 9 May 2022

See all articles by Samuel Antill

Samuel Antill

Harvard Business School

Megan Hunter

Boston College - Carroll School of Management

Date Written: May 6, 2022


Using incentivized randomized experiments, we estimate the causal effect of a Chapter 11 bankruptcy filing on consumer demand for the bankrupt firm's products. Knowledge of a firm's bankruptcy reduces a consumer's willingness-to-pay by 18-35%, depending on the industry. We show evidence that consumers fear both (i) a liquidation preventing future relationships with a firm and (ii) a decline in quality while a firm reorganizes. Estimating a structural model of consumer demand, we quantify the large negative impact of bankruptcy on consumer welfare and a bankrupt firm's market share.

Keywords: Consumer choice, bankruptcy, financial distress, structural estimation, experimental economics, Hertz

JEL Classification: D12, L15, G33

Suggested Citation

Antill, Samuel and Hunter, Megan, Consumer Choice and Corporate Bankruptcy (May 6, 2022). Available at SSRN: or

Samuel Antill (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Megan Hunter

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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