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


  • Pierre-Jean Benghozi

    (CRG - Centre de recherche en gestion - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique)

  • Walter Santagata

    (CRG - Centre de recherche en gestion - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique)


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:

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    References listed on IDEAS

    1. 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.
    2. Gene M. Grossman & Carl Shapiro, 1986. "Foreign Counterfeiting of Status Goods," NBER Working Papers 1915, National Bureau of Economic Research, Inc.
    3. Gene M. Grossman & Carl Shapiro, 1988. "Foreign Counterfeiting of Status Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 79-100.
    4. 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. Santagata Walter, 2002. "Some effect of creativity on fashion market behavior," EBLA Working Papers 200205, University of Turin.
    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.


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