 How a luxury monopolist might benefit from the aspirational utility effect of counterfeiting?Insaf Bekir,
Sana Harbi and
Gilles Grolleau ()
Post-Print from HAL Abstract: Thanks to an intertemporal analytical model, we incorporate aspirational consumers in Veblen markets for luxury fashion items. We show how a luxury monopolist can increase its profits thanks to the presence of counterfeit products. The genuine producer profit is shaped by two opposite effects: (1) a positive aspirational effect resulting from a sales increase due to the aspirational consumers who seek to imitate the lifestyle of snob consumers (2) a negative snob effect, resulting from a sales decrease due to the reduction of consumption by some snob consumers. We identify the conditions under which the overall effect generated by counterfeiting can increase the genuine firm profit. These conditions imply the existence of large aspirational effects and high additional utility gain associated with buying an original product instead of obtaining a counterfeit product. Keywords: ASPIRATIONAL EFFECT; COUNTERFEITING; LUXURY; SNOB; marketing; microeconomy; commercialisation; microéconomie (search for similar items in EconPapers) Published in European Journal of Law and Economics, 2013, 36 (1), pp.169-182. ⟨10.1007/s10657-011-9235-x⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01506025 DOI: 10.1007/s10657-011-9235-x Access Statistics for this paper More papers in Post-Print from HAL |
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