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Counterfeit Goods and Income Inequality

Author

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  • Ms. Stefania Scandizzo

Abstract

This paper examines the effect of counterfeit goods in a world where consumers are differentiated by level of income and innovation is quality enhancing. Counterfeit goods are defined as products with the same characteristics as “originals”, but of lower quality. The effect of imitation on firms’ profits and consumer welfare depends on the distribution of income within the country. In particular, the greater the level of income inequality the larger the increase in consumer welfare due to the imitation, and the smaller the effect on profits of the state-of-the-art firm.

Suggested Citation

  • Ms. Stefania Scandizzo, 2001. "Counterfeit Goods and Income Inequality," IMF Working Papers 2001/013, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2001/013
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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Rosalie Liccardo Pacula & Srikanth Kadiyala & Priscillia Hunt & Alessandro Malchiodi, 2012. "An Alternative Framework for Empirically Measuring the Size of Counterfeit Markets," NBER Working Papers 18171, National Bureau of Economic Research, Inc.
    5. Tirelo Modise Moepswa, 2016. "The Threat of Counterfeit Devices: Complicity vs Vigilance," International Journal of Business Research and Management (IJBRM), Computer Science Journals (CSC Journals), vol. 7(1), pages 1-14, February.

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