Anti-Counterfeiting in a retail Platform: A Game-Theoretic approach

Yu Zhou, Xiang Gao, Suyuan Luo, Yu Xiong and Niangyue Ye

Transportation Research Part E: Logistics and Transportation Review, 2022, vol. 165, issue C

Abstract: The retail platform has developed rapidly, but the problem of fake products has also become increasingly severe. This paper investigates the impact of anti-counterfeiting in a retail platform and the incentives for the platform and the manufacturer to invest in anti-counterfeiting technology by using a game-theoretic model. We consider that the product can be sold directly by the manufacturer, or indirectly through a reseller on the platform. The reseller might also sell fake products, but the platform and the manufacturer can use anti-counterfeiting technology to fight against the fakes. Our analysis shows that the payoff of anti-counterfeiting in the retail platform is not always positive. Specifically, when the production valuation is low, the anti-counterfeiting payoff for the platform (the manufacturer) is negative if the proportion of fakes is sufficiently low (high). We also find that anti-counterfeiting may harm consumer surplus and social welfare. In addition, if the investment cost of anti-counterfeiting is high, at most one firm, either the platform or the manufacturer, has the incentive to invest in anti-counterfeiting contingent on the relative valuation on the platform’s services. Finally, with the investment in anti-counterfeiting, the platform should provide better services than before for surviving in the market.

Keywords: Anti-counterfeiting; Dual channel; Retail management; Platform economics; Game theory (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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DOI: 10.1016/j.tre.2022.102839

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