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Annals of Operations Research

, Volume 192, Issue 1, pp 49–66 | Cite as

Fighting strategies in a market with counterfeits

  • Jie ZhangEmail author
  • L. Jeff Hong
  • Rachel Q. Zhang
Article

Abstract

Counterfeiting is a widely spread phenomenon and has seen rapid growth in recent years. In this paper, we adopt the standard vertical differentiation model and allow consumers the choices of purchasing an authentic product, purchasing a counterfeit, or not buying. We focus on how non-deceptive counterfeits, which consumers know at time of purchase that the products are counterfeits with certainty, affect the price, market share and profitability of brand name products. We also consider the strategies for brand name companies to fight counterfeiting. We compare different fighting strategies in a market with one brand name product and its counterfeit, and derive equilibrium fighting strategies in a market with two competing brand name products and a counterfeit under general conditions.

Keywords

Nash Equilibrium Quality Level Chinese Market Software Piracy Authentic Product 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Supplementary material

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Department of Industrial Engineering and Logistics ManagementThe Hong Kong University of Science and TechnologyKowloonP.R. China

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