IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v175y2023ics1366554523001436.html
   My bibliography  Save this article

Combating counterfeits with the Blockchain-technology-supported platform under government enforcement

Author

Listed:
  • He, Chao
  • Tan, Chunqiao
  • Ip, W.H.
  • Wu, C.H.

Abstract

The intrinsic value of brand names has led to the widespread presence of counterfeits in multi-industries. Although government enforcement plays a role in combating counterfeits, it is difficult to fundamentally curb counterfeiting. This paper examines how the brand-name firm adopts the blockchain-technology-supported (BTS) platform in dealing with counterfeits under government enforcement. We consider a market with a manufacturer (i.e., a brand-name firm) and a counterfeiter. First, we develop a signaling game model to analyze the negative impact of deceptive sales. The results show that, under weak government enforcement and a high rampancy level of counterfeits, deceptive sales will decrease the expected demand for authentic products, the manufacturer’s expected profit, the expected consumer surplus, and the expected social welfare. Although government enforcement forces the counterfeiter to implement non-deceptive sales, it will decrease the expected consumer surplus under symmetric quality information. Then, we develop a Stackelberg game model to analyze the manufacturer’s adoption strategy for the BTS platform. We find that weaker government enforcement will incentivize the manufacturer to adopt the BTS platform. However, the manufacturer does not always adopt the BTS platform even if the counterfeiter implements deceptive sales. Finally, we analyze the effect of adopting the BTS platform under government enforcement. We reveal that the role of the BTS platform in improving consumer rights is stronger than that in combating counterfeits, and the effect of adopting the BTS platform will strengthen as government enforcement weakens.

Suggested Citation

  • He, Chao & Tan, Chunqiao & Ip, W.H. & Wu, C.H., 2023. "Combating counterfeits with the Blockchain-technology-supported platform under government enforcement," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:transe:v:175:y:2023:i:c:s1366554523001436
    DOI: 10.1016/j.tre.2023.103155
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554523001436
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2023.103155?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jiho Yoon & Srinivas Talluri & Hakan Yildiz & Chwen Sheu, 2020. "The value of Blockchain technology implementation in international trades under demand volatility risk," International Journal of Production Research, Taylor & Francis Journals, vol. 58(7), pages 2163-2183, April.
    2. Hubert Pun & Gregory D. DeYong, 2017. "Competing with Copycats When Customers Are Strategic," Manufacturing & Service Operations Management, INFORMS, vol. 19(3), pages 403-418, July.
    3. Jie Zhang & L. Hong & Rachel Zhang, 2012. "Fighting strategies in a market with counterfeits," Annals of Operations Research, Springer, vol. 192(1), pages 49-66, January.
    4. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    5. Volodymyr Babich & Gilles Hilary, 2020. "OM Forum—Distributed Ledgers and Operations: What Operations Management Researchers Should Know About Blockchain Technology," Manufacturing & Service Operations Management, INFORMS, vol. 22(2), pages 223-245, March.
    6. Ehsan Aghamohammadzadeh & Omid Fatahi Valilai, 2020. "A novel cloud manufacturing service composition platform enabled by Blockchain technology," International Journal of Production Research, Taylor & Francis Journals, vol. 58(17), pages 5280-5298, September.
    7. Zhang, Jie & Zhang, Rachel Q., 2015. "Supply chain structure in a market with deceptive counterfeits," European Journal of Operational Research, Elsevier, vol. 240(1), pages 84-97.
    8. Choi, Tsan-Ming, 2019. "Blockchain-technology-supported platforms for diamond authentication and certification in luxury supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 17-29.
    9. Grossman, Gene M & Shapiro, Carl, 1988. "Counterfeit-Product Trade," American Economic Review, American Economic Association, vol. 78(1), pages 59-75, March.
    10. Wang, Zhen & Duan, Yongrui & Huo, Jiazhen, 2022. "The impact of government intervention measures on recycling of waste electrical and electronic equipment in China considering consumer decision," Energy Policy, Elsevier, vol. 160(C).
    11. Alexander Davidson & Marcelo Vinhal Nepomuceno & Michel Laroche, 2019. "Shame on You: When Materialism Leads to Purchase Intentions Toward Counterfeit Products," Journal of Business Ethics, Springer, vol. 155(2), pages 479-494, March.
    12. Dutta, Pankaj & Choi, Tsan-Ming & Somani, Surabhi & Butala, Richa, 2020. "Blockchain technology in supply chain operations: Applications, challenges and research opportunities," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    13. Atanu Lahiri & Debabrata Dey, 2013. "Effects of Piracy on Quality of Information Goods," Management Science, INFORMS, vol. 59(1), pages 245-264, June.
    14. Choi, Tsan-Ming & Luo, Suyuan, 2019. "Data quality challenges for sustainable fashion supply chain operations in emerging markets: Roles of blockchain, government sponsors and environment taxes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 139-152.
    15. Hubert Pun & Jayashankar M. Swaminathan & Pengwen Hou, 2021. "Blockchain Adoption for Combating Deceptive Counterfeits," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 864-882, April.
    16. Christine Kim & Eunju Ko & Jaeyun Koh, 2016. "Consumer attitudes and purchase intentions toward fashion counterfeits: Moderating the effects of types of counterfeit goods and consumer characteristics," Journal of Global Fashion Marketing, Taylor & Francis Journals, vol. 7(1), pages 15-29, January.
    17. Yi Qian, 2014. "Brand Management and Strategies Against Counterfeits," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 317-343, June.
    18. Dong, Jingya & Song, Chunhe & Liu, Shuo & Yin, Huanhuan & Zheng, Hao & Li, Yuanjian, 2022. "Decentralized peer-to-peer energy trading strategy in energy blockchain environment: A game-theoretic approach," Applied Energy, Elsevier, vol. 325(C).
    19. Sun, Jiong & Zhang, Xing & Zhu, Qingyuan, 2020. "Counterfeiters in Online Marketplaces: Stealing Your Sales or Sharing Your Costs," Journal of Retailing, Elsevier, vol. 96(2), pages 189-202.
    20. Alexander Davidson & Marcelo Vinhal Nepomuceno & Michel Laroche, 2019. "Erratum to: Shame on You: When Materialism Leads to Purchase Intentions Toward Counterfeit Products," Journal of Business Ethics, Springer, vol. 155(4), pages 1215-1215, April.
    21. Yi Qian & Qiang Gong & Yuxin Chen, 2015. "Untangling Searchable and Experiential Quality Responses to Counterfeits," Marketing Science, INFORMS, vol. 34(4), pages 522-538, July.
    22. Sarah Yini Gao & Wei Shi Lim & Christopher S. Tang, 2017. "Entry of Copycats of Luxury Brands," Marketing Science, INFORMS, vol. 36(2), pages 274-289, March.
    23. Gene M. Grossman & Carl Shapiro, 1988. "Foreign Counterfeiting of Status Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 79-100.
    24. Hafezi, Maryam & Zolfagharinia, Hossein, 2018. "Green product development and environmental performance: Investigating the role of government regulations," International Journal of Production Economics, Elsevier, vol. 204(C), pages 395-410.
    25. Soo-Haeng Cho & Xin Fang & Sridhar Tayur, 2015. "Combating Strategic Counterfeiters in Licit and Illicit Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 17(3), pages 273-289, July.
    26. Jie Chen & Lefa Teng & Yonghai Liao, 2018. "Counterfeit Luxuries: Does Moral Reasoning Strategy Influence Consumers’ Pursuit of Counterfeits?," Journal of Business Ethics, Springer, vol. 151(1), pages 249-264, August.
    27. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Xingfen & Zhou, Zhongbao & Zhong, Feimin & Hu, Minhui, 2024. "Resolving the information reliability issue in live streaming through blockchain adoption," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 189(C).
    2. Zhang, Qian & Li, Yongjian & Hou, Pengwen & Wang, Jun, 2024. "Price signal or blockchain technology? Quality information disclosure in dual-channel supply chains," European Journal of Operational Research, Elsevier, vol. 316(1), pages 126-137.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Yingjia & Lin, Jiaxin & Choi, Tsan-Ming, 2020. "Gray market and counterfeiting in supply chains: A review of the operations literature and implications to luxury industries," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    2. Zhou, Yu & Gao, Xiang & Luo, Suyuan & Xiong, Yu & Ye, Niangyue, 2022. "Anti-Counterfeiting in a retail Platform: A Game-Theoretic approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    3. Hu, Shu & Fu, Ke & Wu, Tong, 2021. "The role of consumer behavior and power structures in coping with shoddy goods," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    4. Li, Zhiwen & Xu, Xianhao & Bai, Qingguo & Guan, Xu & Zeng, Kuan, 2021. "The interplay between blockchain adoption and channel selection in combating counterfeits," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    5. Bin Shen & Ciwei Dong & Stefan Minner, 2022. "Combating Copycats in the Supply Chain with Permissioned Blockchain Technology," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 138-154, January.
    6. Gao, Sarah Yini & Lim, Wei Shi & Ye, Ziqiu, 2023. "Optimal channel strategy of luxury brands in the presence of online marketplace and copycats," European Journal of Operational Research, Elsevier, vol. 308(2), pages 709-721.
    7. Niu, Baozhuang & Ruan, Yiyuan & Xu, Haotao, 2024. "Less is more? Channel separation to mitigate triple competition and combat copycats in agency e-commerce," European Journal of Operational Research, Elsevier, vol. 315(1), pages 242-270.
    8. Hubert Pun & Jayashankar M. Swaminathan & Pengwen Hou, 2021. "Blockchain Adoption for Combating Deceptive Counterfeits," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 864-882, April.
    9. Naoum-Sawaya, Joe & Elhedhli, Samir & De Carvalho, Paulo, 2023. "Strategic blockchain adoption to deter deceptive counterfeiters," European Journal of Operational Research, Elsevier, vol. 311(1), pages 373-386.
    10. Bian, Junsong & Zhang, Guoqing & Zhou, Guanghui, 2023. "The strategic impact of vertical integration on non-deceptive counterfeiting," International Journal of Production Economics, Elsevier, vol. 260(C).
    11. Niu, Baozhuang & Ruan, Yiyuan & Xu, Haotao, 2023. "Turn a blind eye? E-tailer's blockchain participation considering upstream competition between copycats and brands," International Journal of Production Economics, Elsevier, vol. 265(C).
    12. Sun, Jiong & Zhang, Xing & Zhu, Qingyuan, 2020. "Counterfeiters in Online Marketplaces: Stealing Your Sales or Sharing Your Costs," Journal of Retailing, Elsevier, vol. 96(2), pages 189-202.
    13. Choi, Tsan-Ming & Siqin, Tana, 2022. "Blockchain in logistics and production from Blockchain 1.0 to Blockchain 5.0: An intra-inter-organizational framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
    14. Wagner, Laura & Gürbüz, Mustafa Ҫagri & Parlar, Mahmut, 2019. "Is it fake? Using potentially low quality suppliers as back-up when genuine suppliers are unavailable," International Journal of Production Economics, Elsevier, vol. 213(C), pages 185-200.
    15. Hubert Pun & Pengwen Hou, 2022. "Combating copycatting from emerging market suppliers in global supply chains," Production and Operations Management, Production and Operations Management Society, vol. 31(8), pages 3304-3319, August.
    16. Li, Qingying & Ma, Manqiong & Shi, Tianqin & Zhu, Chen, 2022. "Green investment in a sustainable supply chain: The role of blockchain and fairness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    17. Wang, Manman & Yang, Feng & Shan, Feifei & Guo, Yu, 2024. "Blockchain adoption for combating remanufacturing perceived risks in a reverse supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    18. Xu, Lei & Choi, Tsan-Ming & Shi, Xiaoran & Zhou, Chi, 2024. "Gray marketing phenomena in global supply chains: Can pricing strategies help?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    19. Niu, Baozhuang & Mu, Zihao & Cao, Bin & Gao, Jie, 2021. "Should multinational firms implement blockchain to provide quality verification?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    20. Busby, J.S., 2019. "The co-evolution of competition and parasitism in the resource-based view: A risk model of product counterfeiting," European Journal of Operational Research, Elsevier, vol. 276(1), pages 300-313.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:175:y:2023:i:c:s1366554523001436. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.