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Combating Strategic Counterfeiters In Licit And Illicit Supply Chains, Soo-Haeng Cho, Xin Fang, Sridhar Tayur

Research Collection Lee Kong Chian School Of Business

Counterfeit goods are becoming more sophisticated, from shoes to infant milk powder to aircraft parts, creating problems for consumers, firms, and governments. By comparing two types of counterfeiters—deceptive, so infiltrating a licit (but complicit) distributor, or nondeceptive in an illicit channel—we provide insights into the impact of anticounterfeiting strategies on a brand-name company, a counterfeiter, and consumers. Our analysis highlights that the effectiveness of these strategies depends critically on whether a brand-name company faces a nondeceptive or deceptive counterfeiter. For example, by improving quality, the brand-name company can improve her expected profit against a nondeceptive counterfeiter when the counterfeiter steals …