publication . Preprint . 2001

Counterfeit Goods and Income Inequality

Stefania Scandizzo;
Open Access
  • Published: 01 Jan 2001
Abstract
This paper examines the effect of counterfeit goods in a world where consumers are differentiated by level of income and innovation is quality enhancing. Counterfeit goods are defined as products with the same characteristics as “originals”, but of lower quality. The effect of imitation on firms’ profits and consumer welfare depends on the distribution of income within the country. In particular, the greater the level of income inequality the larger the increase in consumer welfare due to the imitation, and the smaller the effect on profits of the state-of-the-art firm.
Subjects
free text keywords: Oligopoly and Other Forms of Market Imperfection, Firm Strategy, And Market Performance, [Consumer goods;Economic models;Income distribution;counterfeit goods, vertical product differentiation, inequality, product differentiation, market structure, consumer surplus, patent protection, Market Structure and Pricing]
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