Assoc. Prof. Rüdiger Bachmann

Firms and Collective Reputation

Rüdiger Bachmann, together with Gabriel Ehrlich, Ying Fan and Dimitrije Ruzic, has authored a recent NBER Working Paper (26117) on the Volkswagen emissions scandal, using it as a natural experiment to provide evidence that collective reputation externalities matter for firms. The researchers determined that the Volkswagen scandal reduced the US sales of the other German auto manufacturers – BMW, Mercedes-Benz and Smart – by about 105,000 vehicles worth $5.2 billion. The decline was principally driven by an adverse reputation spillover, which was reinforced by consumer substitution away from diesel vehicles and was partially offset by substitution away from Volkswagen. These estimates come from a model of vehicle demand, the conclusions of which are also consistent with difference-in-differences estimates. Direct evidence is provided on internet search behavior and consumer sentiment displayed on social media to support the interpretation that the estimates reflect a reputation spillover.

Mr. Bachmann’s research area is macroeconomics with a specialization in the macroeconomics of heterogeneous agents. He is also interested in the implications of uncertainty and expectation formation on macroeconomic outcomes.

Rüdiger Bachmann an Associate Professor of Economics at the University of Notre Dame. He received undergraduate degrees in Economics and Philosophy from Mainz University and a PhD from Yale University in 2007. His academic career includes an assistant professorship at the University of Michigan, full professorships at the RWTH Aachen University and Frankfurt University, as well as visiting professorships at the University of Pennsylvania, Harvard University and Boston University. Mr. Bachmann also serves as an Associate Editor for the Economic Journal and as a member of the executive committee of the German Economic Association. He is a CEPR research affiliate, a CESifo Research Network Fellow and a Research Professor at the ifo Center for Macroeconomics and Surveys. His research has been published in the American Economic Review, the Journal of Monetary Economics, the American Economic Journal: Macroeconomics, the American Economic Journal: Economic Policy, the Review of Economic Dynamics, Quantitative Economics, Economics Letters, and Economic Theory.