Piracy versus Monopoly in the Market for Conspicuous Consumption

Michael Mandler

Economic Journal, 2018, vol. 128, issue 610, 1257-1275

Abstract: When luxury purchases signal the incomes of buyers, a monopoly will deliver signals efficiently. If in contrast competitors sell counterfeit copies of luxury goods at low prices, consumers will have to buy larger quantities or higher qualities to transmit the same signals, which wastes resources. Competition does maximal harm when entrants produce indistinguishable replicas of existing luxury goods since prices will fall the furthest. The choice of which goods should deliver signals presents a trade†off: goods with a large gap between marginal cost and the price a monopoly would charge signal efficiently but those large gaps increase the reward to counterfeiting.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/ecoj.12437

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:econjl:v:128:y:2018:i:610:p:1257-1275

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1468-0297

Access Statistics for this article

Economic Journal is currently edited by Estelle Cantillon, Martin Cripps, Andrea Galeotti, Morten Ravn, Kjell G. Salvanes, Frederic Vermeulen, Hans-Joachim Voth and Rachel Kranton

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().