I don’t think this blacklisting applies either. You are ignoring the fact that whistleblowers can operate anonymously.
These companies chose to then a blind eye on themselves and each other.
Anonymous only works in a small spectrum of possible whistle blowing - where the issue and the players are large enough to matter, but small enough that it won't be trivial to guess who the anonymous tip came from.
If game theory is stacked against ethical behavior in a particular situation, I'll back ethical behavior. It's encouraging how often the game theory gets tripped up by factors outside the "rules".
But the trouble is, that as these things become more of the fabric of the culture, people's behaviour takes them into account, and then it doesn't work as well as it used to.
The assumption there is that you're all guilty. I agree, when you're all cheating, it's hard to safely get to a point you're not cheating and can inform on others, but the solution to that is simple, don't cheat in the first place. An actual rational actor would realize that cheating opens you up to this situation where you've exposed yourself to a prisoners dilemma that you can't easily extract yourself from, and all for the chance to just have the same advantage as everyone else. Not cheating in the first place and making sure all the cheaters are punished seems a far better strategy.
That said, it's possible this was an emergent phenomenon, where none of them initially were sure the others were cheating, but felt they had to cheat themselves to compete, and by the time it's obvious they are all cheating, there's no chance for one of them to benefit by being clean and calling out all the others.
That said, I disagree with "the solution to that is simple, don't cheat in the first place", for the reasons I mentioned: if all your competitors suddenly start to cheat, telling on them only works if you can ensure they all get burned down to the ground as a result. If some survive, you'll now be competing with them as an actor nobody trusts, and nobody wants to deal with. If that's a realistic outcome, you may as well just quit.
Isn't that assuming you have to out yourself to identify others? That seems like something a company could coordinate well such that there was little or no indication of where it came from (a source identifying one or two bad actors and calling for industry wide testing would serve their interests without specifically outing them). And I'm not sure why they need to get burned down to the ground. It's about removing the advantages they've gained through cheating, and possibly applying a social penalty if it was bad enough, not ensuring they are destroyed.
> If some survive, you'll now be competing with them as an actor nobody trusts, and nobody wants to deal with.
Eh, even if it did come out that your company was responsible for outing others, this is business where past behavior has less sway, and knowing the other party will follow the rules is hardly a disqualifying factor as long as you don't do something with them that isn't following the rules. It's not like competitors are commonly giving ammunition to each other with the understanding it won't be used. And if they aren't working with you because they can't without exposing more cheating... well then that's a problem they should be trying to fix already, given the new realities.
I think in any well functioning market this all works out normally. The automotive market doesn't seem to be a well functioning one though.
That's the reason almost nobody ever blows the whistle: the prisoner's dilemma variant here is the iterated one, and there are more than two players. If you defect, you get blacklisted. It doesn't matter if you're an individual abused by an employer, or a big company that, for a brief moment, grew some conscience. The only time when blowing a whistle makes sense, from a self-preservation standpoint, is when you have a backup plan for what to do when the whistle gets ignored, but everyone knows who blew it.
The corollary to that is, to allow for whistleblowing to be an option, the defector needs to be protected, and this must be public knowledge. If people have any perception of personal risk here, most will stay silent.