Analysis of non-deceptive copycatting

Junsong Bian, Chenchen Yang, Xiaolong Guo, Richard Tay and Suzhen Liang
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Junsong Bian: ESC [Rennes] - ESC Rennes School of Business
Chenchen Yang: HFUT - Hefei University of Technology
Xiaolong Guo: USTC - University of Science and Technology of China [Hefei]
Richard Tay: RMIT University - Royal Melbourne Institute of Technology University

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Abstract: This paper examines the impact of non-deceptive copycats considering the authentic firm's effort in fighting copycats. We study how non-deceptive copycatting affects the authentic firm's quality investment, demand, profitability, and consumer welfare. We reveal that, in contrast to the benchmarking scenario of no copycatting, non-deceptive copycats do not necessarily reduce the quality and market share of the genuine product, depending on the extent of copycat imitation and the quality investment efficiency of the genuine firm. Closer copycat imitation can either enhance or reduce consumer and social welfare, contingent upon the extent of copycat imitation and the quality investment efficiency of the genuine product. Furthermore, the authentic firm benefits from the presence of such copycats with sufficiently efficient anti-copycat effort and copycat penalty. In addition, we demonstrate that the genuine firm can drive copycat products out of the market with sufficiently efficient brand quality investment and low imitability, which further differentiates the quality between the genuine product and the copycat, and thus shrinks the demand for the copycat product. Finally, the main model is also generalised to study multiple scenarios: Stackelberg competition, two-feature copycat imitation, and with different production costs.

Keywords: Supply chain management SCM; Copycat; Imitation; Product; Social welfare (search for similar items in EconPapers)
Date: 2024-03-09
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Published in Journal of the Operational Research Society, 2024, 75 (12), pp.2421-2442. ⟨10.1080/01605682.2024.2323024⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04942317

DOI: 10.1080/01605682.2024.2323024

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