The authors study the positive and normative effects of counterfeiting, i.e., trademark infringement, in markets where cons umers are not deceived by forgeries. Consumers are willing to pay mor e for counterfeits than for generic merchandise of similar quality be cause they value the prestige associated with brand-name trademarks. Counterfeiters of status goods impose a negative externality on consu mers of genuine items, as fakes degrade the status associated with a given label. But counterfeits allow consumers to unbundle the status and quality attributes of the brand-name products and alter the compe tition among oligopolistic trademark owners. The authors analyze two policies designed to combat counterfeiting: enforcement policy which increases the likelihood of confiscation of illegal items, and the im position of a tariff on low-quality imports. Copyright 1988, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Volume (Year): 103 (1988) Issue (Month): 1 (February) Pages: 79-100 Download reference. The following formats are available: HTML
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Dixit, Avinash K, 1986.
"Comparative Statics for Oligopoly,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-22, February.
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