NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Counterfeit-Product Trade

Gene M. Grossman, Carl Shapiro

NBER Working Paper No. 1876 (Also Reprint No. r1086)
Issued in March 1986
NBER Program(s):   ITI   IFM

We analyze a two-country model of trade in both legitimate and counterfeit products. Domestic firms own trademarks and establish reputations for delivering high-quality products in a steady-state equilibrium. Foreign suppliers export legitimate low-quality merchandise and counterfeits of domestic brand-name goods. Heterogeneous home consumers either purchase low-quality imports or buy brand-name products, rationally expecting some degree of counterfeiting of the latter. We characterize a counterfeiting equilibrium and explore its properties. We describe the positive and normative effects of counterfeiting in comparison with a no-counterfeiting benchmark. Finally, we provide a welfare analysis of border inspection policy and of policy regarding the disposition of counterfeit goods that are confiscated at the border.

download in pdf format
   (365 K)

download in djvu format
   (265 K)

email paper

This paper is available as PDF (365 K) or DjVu (265 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1876

Published: American Economic Review, Vol. 78, No. 1, March 1988, pp. 59-75.

Users who downloaded this paper also downloaded these:
Grossman and Shapiro w1915 Foreign Counterfeiting of Status Goods
Qian w16785 Counterfeiters: Foes or Friends? How Do Counterfeits Affect Different Product Quality Tiers?
Qian w17849 Brand Management and Strategies Against Counterfeits
Qian and Xie w16692 Investigating the Dynamic Effects of Counterfeits with a Random Changepoint Simultaneous Equation Model
Chin and Grossman w2769 Intellectual Property Rights and North-South Trade
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us