Deceptive counterfeits and anti-counterfeiting: a blessing in disguise?

Junsong Bian, Suzhen Liang, Xuan Zhao, Yong Liu and Kin Keung Lai
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Junsong Bian: Rennes SB - Rennes School of Business
Suzhen Liang: Rennes SB - Rennes School of Business
Xuan Zhao: WLU - Wilfrid Laurier University
Yong Liu: University of Arizona
Kin Keung Lai: SNNU - Shaanxi Normal University

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Abstract: Despite various anti-counterfeiting measures, counterfeits thrive as one of the biggest threats to product brand innovation and sales. This study employs an analytical game theoretical model to examine the strategic interactions between an authentic brand firm and a deceptive counterfeiter to provide managerial implications for anti-counterfeiting. Firstly, we find the authentic product firm can be worse off with a heavier penalty for counterfeits. Secondly, the authentic product firm benefits from more costly anti-counterfeiting with sufficiently cheap quality improvement and counterfeiting. Next, the authentic product firm benefits from deeper counterfeit penetration when the penalty is sufficiently high and counterfeiting is costly. Finally, we reveal that the counterfeiter only benefits from deeper counterfeit penetration when the counterfeit imitation is sufficiently costly, or the existing level of counterfeit penetration is not too high. To verify the robustness of the results, we further extend the main model to multiple scenarios including consumers' brand loyalty, counterfeit penetration uncertainty, etc

Keywords: Innovation; Brand protection; Anti-counterfeiting; Deceptive counterfeits; Responsible production; Applied game theory (search for similar items in EconPapers)
Date: 2025-06-10
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Published in International Journal of Production Research, 2025, 63 (23), pp.8880-8902. ⟨10.1080/00207543.2025.2516771⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05403274

DOI: 10.1080/00207543.2025.2516771

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