This blog post is a companion to a paper, co-authored by Roy Shapira and me, provisionally titled “Theory of the Nudnik: The Future of Consumer Activists and How We Can Stop It”
In this Paper we highlight the role of consumer activism in the generation of firm reputation. In particular, we focus on a subspecies of consumers which we dub as ‘nudniks’, those consumer activists who call in to complain, demand to speak with the manager, write online reviews, and file lawsuits. Nudniks are typified by an innate sense of justice or idiosyncratic cost structures, leading them to pursue action where most will not. While often perceived as and derided for being petty, rapacious, or vindictive, nudniks play a pivotal role in the evolution of reputational information and enforcement of legal norms. Nudniks are the unsung heroes of market discipline.
After evaluating the social importance of nudniks, we argue that nudniks are attractive prey to predatory firms, who seek to buy off nudniks, discredit them, and mostly, gag them. With the advent of big data and tailored-transactions, nudniks are endangered species. We highlight in the paper some legal techniques that can help to preserve them from extinction.
Exhibit A: A full page ad on the print edition of the Wall Street Journal (January, 31st, 2018)
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