How a Luxury Monopolist Might Benefit from a Stringent Counterfeit Monitoring Regime
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.
Volume (Year): 4 (2005)
Issue (Month): 3 (December)
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- 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 567-96, October.
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- 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 349-73, June.
- Belk, Russell W, 1988. " Possessions and the Extended Self," Journal of Consumer Research, Oxford University Press, vol. 15(2), pages 139-68, September.
- 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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