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How a Luxury Monopolist Might Benefit from a Stringent Counterfeit Monitoring Regime

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  • Jen-Te Yao

    (Department of Economics, Aletheia University, Taiwan)

Abstract

Most studies in the intellectual property rights literature claim that the presence of counterfeit products hurts monopolists. This paper shows that this is not always true in a market with Veblen effects where a counterfeit monitoring regime is enforced. This paper finds an effect due to intellectual property rights enforcement that may be strong enough to produce a selling price that is higher than the price chosen without counterfeiting. Consequently, the monopolist may obtain greater profits in the presence of counterfeiting than in its absence.

Suggested Citation

  • Jen-Te Yao, 2005. "How a Luxury Monopolist Might Benefit from a Stringent Counterfeit Monitoring Regime," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 4(3), pages 177-192, December.
    • Handle: RePEc:ijb:journl:v:4:y:2005:i:3:p:177-192
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    References listed on IDEAS

    as
    1. Belk, Russell W, 1988. "Possessions and the Extended Self," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(2), pages 139-168, September.
    2. Baker, Matthew J & Cunningham, Brendan M, 2006. "Court Decisions and Equity Markets: Estimating the Value of Copyright Protection," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 567-596, October.
    3. H. Leibenstein, 1950. "Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 183-207.
    4. Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-373, June.
    5. Jen-Te Yao, 2005. "Counterfeiting and an Optimal Monitoring Policy," European Journal of Law and Economics, Springer, vol. 19(1), pages 95-114, January.
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    Citations

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    Cited by:

    1. Wu, Chien-Wei & Gong, Jyh-Chyi & Chiu, Hsien-Hung, 2016. "Duopoly competition with non-deceptive counterfeiters," International Review of Law and Economics, Elsevier, vol. 47(C), pages 33-40.
    2. Pittiglio, Rosanna, 2023. "Counterfeiting and firm survival. Do international trade activities matter?," International Business Review, Elsevier, vol. 32(5).
    3. Beqiraj, Elton & Fedeli, Silvia & Giuriato, Luisa, 2020. "Policy tolerance of economic crime? An empirical analysis of the effect of counterfeiting on Italian trade," European Journal of Political Economy, Elsevier, vol. 65(C).
    4. Karatzas, Stelios & Kapoulas, Alexandros & Priporas, Constantinos Vasilios, 2019. "Consumers' perceptions on complexity and prospects of ethical luxury: Qualitative insights from Taiwan," Australasian marketing journal, Elsevier, vol. 27(4), pages 224-232.
    5. Yao, Jen-Te, 2015. "The impact of counterfeit-purchase penalties on anti-counterfeiting under deceptive counterfeiting," Journal of Economics and Business, Elsevier, vol. 80(C), pages 51-61.
    6. Pittiglio, Rosanna, 2024. "Counterfeiting and firm survival. Evidence from the Italian manufacturing industry," Economic Systems, Elsevier, vol. 48(2).

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    More about this item

    Keywords

    intellectual property rights; counterfeiting; Veblen effects;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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