This chapter considers fake motorcycle spare parts whose value is determined by duration and quality. A bad image about domestic products, which is often present in developing countries, causes consumers to distrust domestic brand names. That is a major reason why fake packaging was pervasive in Vietnam. I first explain the fact, obtained by field research, that repairpersons have incentives not only to use fake spare parts but also to mitigate incomplete consumer information about quality. I then analyse this phenomenon in a theoretical model, indicating inconsistent incentives concerning social welfare and consumers' surpluses. I also consider a counterfeiting game between counterfeiters producing products of differing quality and show that a counterfeiter producing second-tier products does not always prefer no enforcement, while a counterfeiter producing lowest quality products always prefers it.
CITATION STYLE
Domon, K. (2018). Fake Spare Parts When No Domestic Brand Names Can Be Trusted. In An Economic Analysis of Intellectual Property Rights Infringement (pp. 35–59). Springer International Publishing. https://doi.org/10.1007/978-3-319-90466-5_3
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