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Market Piracy in the Design-Based Industry : Economics and Policy regulation

Author

Listed:
  • Pierre-Jean Benghozi

    (CRG - Centre de recherche en gestion - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

  • Walter Santagata

    (CRG - Centre de recherche en gestion - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

Abstract

Market piracy in the design-based industry is an expanding worldwide phenomenon (Grossman and Shapiro, 1988a,b; Chaudhry and Walsh, 1996; Schultz II and Saprito, 1996). It deserves a great deal of attention both because of its impressive international dimension (Verma, 1996) and its intrinsic illegality, ambiguity and powerfull potential links with criminal organizations (Andreano and Sigfried, 1980; Fiorentini and Peltzman, 1995). The aim of this paper is to develop theoretical arguments about economic agents' behavior and to shed some light on the main regulatory issues of illegal markets. At a first sight the room for rational incentives to commercial piracy is self-evident. On one hand, an original backpack by the Italian stylist Prada costs, for instance, $ 510 in Manhattan, New York, and a bootleg copy costs $ 70 in Rome, just in front of Castel Sant'Angelo. On the other hand, the number of units sold can be impressive: as an example Louis Vuitton sells 3.5 millions units per year. Market piracy is usually noticed in sectors such as luxury goods or fashion, but piracy can also be observed in more traditional sectors such as car manufacturers, "bureautic" industry, cooking utensils, aircraft-parts and so on.

Suggested Citation

  • Pierre-Jean Benghozi & Walter Santagata, 2001. "Market Piracy in the Design-Based Industry : Economics and Policy regulation," Post-Print hal-00262515, HAL.
    • Handle: RePEc:hal:journl:hal-00262515
    Note: View the original document on HAL open archive server: https://hal.science/hal-00262515
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    References listed on IDEAS

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    1. Pierre-Jean Benghozi & Thomas Paris, 1999. "Copyright and distribution channels : an attempt to model remuneration structures," Post-Print hal-00262517, HAL.
    2. Landes, William M & Posner, Richard A, 1987. "Trademark Law: An Economic Perspective," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 265-309, October.
    3. 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.
    4. Hansmann, Henry & Santilli, Marina, 1997. "Authors' and Artists' Moral Rights: A Comparative Legal and Economic Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 26(1), pages 95-143, January.
    5. Huntley, J. A. K. & Stephen, Frank H., 1995. "Unfair competition, consumer deception, and brand copying: An economic perspective," International Review of Law and Economics, Elsevier, vol. 15(4), pages 443-462, December.
    6. Filip Palda, 1998. "Evasive Ability and the Efficiency Cost of the Underground Economy," Canadian Journal of Economics, Canadian Economics Association, vol. 31(5), pages 1118-1138, November.
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    Cited by:

    1. Céline Abecassis & Pierre-Jean Benghozi, 2005. "Design configuration in fashion and design industries," Post-Print hal-00262989, HAL.
    2. Christian Barrère & Sophie Delabruyère, 2011. "Intellectual property rights on creativity and heritage: the case of the fashion industry," European Journal of Law and Economics, Springer, vol. 32(3), pages 305-339, December.
    3. Christian Barrère & Sophie Delabruyère, 2011. "Intellectual property rights on creativity and heritage: the case of the fashion industry [Droits de propriété intellectuelle, créativité et patrimoine : le cas de la mode]," Post-Print hal-02615221, HAL.
    4. Christian Barrère, 2021. "Das Französische Luxusmodell [The French Luxury Model]," Post-Print halshs-03495849, HAL.
    5. Santagata Walter, 2002. "Some effect of creativity on fashion market behavior," EBLA Working Papers 200205, University of Turin.

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