The Volkswagen fraud in the context of economic theory

Wolfgang H. Schulz and Bettina Arnegger

International Journal of Management Practice, 2021, vol. 14, issue 6, 645-659

Abstract: Over the course of more than a decade, the Volkswagen (VW) Group has manipulated the technology built into approximately 11.3 million diesel vehicles worldwide. Despite the fraud, VW has heavily marketed this technology. VW's breaches of environment regulations and the scope of this corporate evasion are especially critical with regard to VW's leading market position and its revelation in terms of the state of the automotive industry and the emission testing regime. The present article not only aims to provide a theoretical-analytical contribution to the assessment of Volkswagen's act of fraud focusing on economic theory but also outlines an interesting framework for business choices in the automotive industry. The definition of passenger vehicles as credence goods, the role of uncertainty and realised positive profits, and the oligopolistic pricing model are introduced as a framework for future research.

Keywords: Volkswagen; Dieselgate; nitrogen oxides; economics; credence goods; uncertainty and realised positive profits; opligopolistic pricing model. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmpra:v:14:y:2021:i:6:p:645-659

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