Understanding and tackling unethical consumption: The case of counterfeit consumption

Jingshi Liu (jliubh@ust.hk), Amy N. Dalton (amy.dalton@ust.hk) and Jiewen Hong (mkjiewen@ust.hk)
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Jingshi Liu: Department of Marketing, Hong Kong University of Science and Technology
Amy N. Dalton: Department of Marketing, Hong Kong University of Science and Technology
Jiewen Hong: Department of Marketing, Hong Kong University of Science and Technology

No 2017-42, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: This research examines how consumers feel when they use counterfeits, and how these feelings affect purchase intentions toward counterfeits and genuine brands. We find that counterfeit users experience mixed emotions, stemming from concerns about the signals the counterfeit might send to others. Accordingly, mixed emotions are stronger in public versus private settings, and among consumers chronically concerned about social signaling (i.e., consumers high in social-adjustive motives). Because mixed emotions can be unpleasant, counterfeit users subsequently gravitate away from counterfeits and toward genuine brands (which communicate largely positive social signals and thus elicit no mixed emotions). In this manner, counterfeit consumption may drive demand for genuine brands. A final experiment tests implications for reducing counterfeit consumption. As predicted, consumers exposed to anti-counterfeiting advertisements designed to elicit mixed emotions are willing to pay a higher price premium for genuine over counterfeit products. Collectively, these findings identify the emotional consequences of counterfeit consumption and highlight that an effective way to understand and reduce counterfeit consumption is to focus on the social context in which many counterfeits are used.

Pages: 63 pages
Date: 2017-08, Revised 2018-03
New Economics Papers: this item is included in nep-cta, nep-ipr and nep-mkt
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