Willingness to Pay for Brand Reputation: Lessons from the Volkswagen Diesel Emissions Scandal

In this study, we use the announcement of the Volkswagen emissions scandalon September 18, 2015, as an exogenous shock to measure consumers’ willing-ness to pay (WTP) for brand reputation. Only Volkswagen diesel cars producedin2009-2015were announced as emissions violators. Using eBay car auction data,we estimate the impacts of the scandal on the prices of Volkswagen emissionsnon-violatingcars. Our difference-in-differences estimates show that final bid prices decreased by 14% and 9% in diesel and gasoline car markets, respectively, whichpurely reflected a decline in consumers’ WTP for Volkswagen’s brand reputation.Additionally, the difference in price-drops between the violating and non-violating diesel cars is statistically insignificant. This may be due to the fact that consumers rationally adjust their WTP by expecting compensation which will almost surely be provided by Volkswagen for violating models

Spectral properties of a limit-periodic Schr\"odinger operator in dimension two

We study Schr\"{o}dinger operator $H=-\Delta+V(x)$ in dimension two, $V(x)$ being a limit-periodic potential. We prove that the spectrum of $H$ contains a semiaxis and there is a family of generalized eigenfunctions at every point of this semiaxis with the following properties. First, the eigenfunctions are close to plane waves $e^{i\langle \vec k,\vec x\rangle }$ at the high energy region. Second, the isoenergetic curves in the space of momenta $\vec k$ corresponding to these eigenfunctions have a form of slightly distorted circles with holes (Cantor type structure). Third, the spectrum corresponding to the eigenfunctions (the semiaxis) is absolutely continuous.Comment: 89 pages, 6 figure