BLOOMINGTON – Ind. – Automotive recalls are occurring at record levels, but seem to be announced after inexplicable delays.
Researchers from the Indiana University Kelley School of Business analyzed 48 years of auto recalls in the United States and found that manufacturers delayed announcements so they could “hide in the herd.”
The delays suggest that recall announcements may not be triggered solely by individual firms’ product quality defect awareness or concern for the public interest, but may also be influenced by competitor recalls, a phenomenon that no prior research had investigated.
Researchers analyzed 3,117 auto recalls over a 48-year period, from 1966 to 2013.