题  目：Food safety, proactive recall and collective reputation

报告人：余建宇  副教授  西南财经大学经济与管理研究院

主持人：夏�君   浙江大学经济学院

时  间：2015年3月27日   星期五   15:00-17:00

地  点：浙大玉泉校区外经贸大楼418室

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摘要：The repeated occurrence of food safety scandals in China has provoked a long-lasting crisis in the food industry, with consumers showing little trust over the domestic products and honest producers being struggling for poor profits. In case of a food safety problem, a direct remedy is product recall. Conventional wisdom suggests that firms can mitigate the long-run damage of a food safety event by a proactive recall, which is initiated before any complaint from consumers or order from a government agency. Astonishingly, in China, no proactive recall was documented in the food sector! All food safety recalls were mandated by the government and mostly were consequence of public media disclosure.

The purpose of this paper is to address two questions: (1) Why firms adopt different recall strategies in different countries? (2) Under what circumstances can proactive recall help firms to build up food safety reputation? Based on the theory of collective reputation, pioneered by Tirole (1996), we develop a dynamic model to incorporate firms’ recall strategy and investigate the impact of such a strategy on industry collective reputation. Moreover, we extend the model of Tirole by introducing production hazard: producers may make mistakes when adopting safe technology. Our results show that proactive recall helps a firm to maintain a good historical record. Hence, it is possible for firms to achieve a high level of collective reputation. However, a firm is willing to initiate proactive recall only if collective reputation is at a high level. This explains the current situation in China: as consumers show little trust (belief on collective reputation is low), firms are not able to recover the recall loss and have no incentive to initiate proactive recall.

                                                                CRPE秘书处
                                                                2015-3-19