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The Impact of Revenue Models on Anti-Counterfeiting Measures for Online Intermediaries

Author

Listed:
  • Xiong Zhang

    (Beijing Jiao Tong University)

  • Xin Zhang

    (University of Science and Technology of China
    City University of Hong Kong)

  • Xuechen Luo

    (Shanghai International Studies University)

  • Wei T. Yue

    (City University of Hong Kong)

Abstract

Some have argued that online intermediaries facilitate sales of counterfeit and fake products. This study investigates the association between anti-counterfeit efforts and the revenue models implemented by intermediaries. We build a stylized analytical model to investigate the conditions under which either the advertising model or the brokerage model would lead to a higher anti-counterfeit effort. We find the intensity of market competition plays a critical role in the intermediary’s decisions on anti-counterfeit effort. Specifically, when market competition is less intense, we show that the intermediary has a greater economic incentive to combat counterfeit selling in the brokerage model than in the advertising model. We supplement empirical support to the results. In particular, using a composite score, we find the intermediary that adopts the advertising model tends to have a lower composite score than one using the brokerage model. Our results suggest the focusing on anti-counterfeit measures is more a means rather than an ends in combating counterfeit sales and the policymakers should pay more attention to the impacts from the adopted revenue model.

Suggested Citation

  • Xiong Zhang & Xin Zhang & Xuechen Luo & Wei T. Yue, 2022. "The Impact of Revenue Models on Anti-Counterfeiting Measures for Online Intermediaries," Information Systems Frontiers, Springer, vol. 24(6), pages 1905-1928, December.
    • Handle: RePEc:spr:infosf:v:24:y:2022:i:6:d:10.1007_s10796-021-10189-7
    DOI: 10.1007/s10796-021-10189-7
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