Free-Riding and Luxury Brands on the Internet

Olivier Bomsel ()

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Abstract: Luxury is a complex industrial activity whose products combine strong vertical differentiation and a meaning value for the consumer. Luxury offers experiences, the economy of which is based on signalling. This gives rise to intense intangible investment internalized by trademark law and vertical restraints in distribution. However, the extent of the added value and the power of externalities associated with communication generate many sources of free-riding. Using the tools of industrial economics, this article analyses how the digitization of information and transactions creates new forms of free-riding in relation to luxury brands. Identifying vertical disintegration as a major source of free-riding, it calls for improved internalization of the enforcement of trademark law by all players in the digital value chain.

Keywords: Free-riding; Luxury Brands (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-com, nep-ict, nep-ipr, nep-pr~ and nep-mkt
Note: View the original document on HAL open archive server: https://hal.science/hal-01110929v1
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Citations: View citations in EconPapers (1)

Published in International Business Research, 2014, 7 (3), pp.60-71. ⟨10.5539/ibr.v7n3p60⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01110929

DOI: 10.5539/ibr.v7n3p60

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