Counterfeiting Good - Michigan 2024 JRY

Notes
CF = Counterfeiting
Neg Supplement for Counterfeiting Good.
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Counterfeiting Good
Inevitable
Counterfeiting inevitable.
Dysfunctional institutions
Amankwah-Amoah ’23 (Joseph, Professor of International Business at Durham University Business School, PhD in Business Studies-IB and Strategy from Swansea University, “Burning issues: Unraveling the nexus between dysfunctional institutions and counterfeiting in developing countries”, November, Social Science & Medicine, https://www.sciencedirect.com/science/article/pii/S0277953623006494, Vol. 337, SE)
Another feature of institutional dysfunction is weak governance and accountability, which also have the potential to erode trust in formal institutions and governments (North, 1990). Studies indicate that dysfunctional institutions, such as weak governance structures, limited regulatory enforcement and oversight, and inadequate regulations, have often been major contributory factors in pushing some businesses to engage in illegitimate activities (Amankwah-Amoah et al., 2018). Another dysfunctional institution with the potential to precipitate the growth of counterfeit products is weak intellectual property protection in many developing economies (Cavusgil et al., 2020). Indeed, weak intellectual property rights enforcement can lead to the theft of ideas and the breaching of copyrights (Ang et al., 2014; Cavusgil et al., 2020; Mandrinos et al., 2022). These deficiencies can pose significant challenges for firms operating in emerging economies or transitional societies where legal systems, property rights, and regulatory frameworks may be incomplete or weak (Ang et al., 2014). History has shown that trade in counterfeit goods and trademark infringements is not new to developing or developed nations (OECD, 2017; Yi et al., 2022). In recent decades, the proliferation of counterfeit products has been further exacerbated by rapid technological advancements, including the internet and social media platforms (Gao and Wu, 2023; Sun et al., 2020). Counterfeit and substandard products continue to bedevil developing countries, unleashing a diverse range of challenges for countries (Amankwah-Amoah, 2022; Amankwah-Amoah and Hinson, 2022; Bian et al., 2023; Bolla et al., 2020; Karungamye, 2022). Accordingly, this study seeks to illuminate how institutional dysfunctions in developing countries can create conditions leading to the evolution and detrimental public health effects of counterfeiting.
B) Ingrained in online markets.
OECD ’08 (Organisation for Economic Co-operation and Development is a forum for data, analysis and best practices in public policy. Works with over 100 countries across the world to build stronger, fairer and cleaner societies - helping to shape better policies for better lives, “The Economic Impact of Counterfeiting and Piracy”, OECD, https://www.oecd-ilibrary.org/docserver/9789264045521-en.pdf?expires=1722018084&id=id&accname=guest&checksum=D01D1B8B9FE82B2E65074A27E4C353FF, ISBN 978-92-64-04551-4, SE)
This study shows that counterfeit and pirated products are being produced and consumed in virtually all economies, with Asia emerging as the single largest-producing region. In recent years, there has been an alarming expansion of the types of products being infringed, from luxury items (such as deluxe watches and designer clothing), to items that have an impact on personal health and safety (such as pharmaceutical products, food and drink, medical equipment, personal care items, toys, tobacco and automotive parts). With respect to magnitude, the study notes that promising work has been done in a number of sectors to measure the extent of counterfeiting and piracy, but that much more can and should be done. The situation of each industry is unique, therefore techniques for carrying out such analysis need to be tailored to the sectors concerned.
To date, no rigorous quantitative analysis has been carried out to measure the overall magnitude of counterfeiting and piracy. This report notes the difficulties that would need to be addressed before such an estimate could be made, and then presents a methodology for estimating the role of counterfeiting and piracy in international trade, which is only a part, albeit an important one, of the total picture. An analysis of international trade data (landed customs value basis1 ) was carried out using the methodology; it suggests that up to USD 200 billion of internationally traded products could have been counterfeit or pirated in 2005. This amount is larger than the national GDPs of about 150 economies2 . The figure does not, however, include counterfeit and pirated products that are produced and consumed domestically, nor does it include non-tangible pirated digital products being distributed via the Internet. If these items were added, the total magnitude of counterfeiting and piracy worldwide could well be several hundred billion dollars more.
Counterfeiting increasing --- Income Inequality
Counterfeiting is only increasing with the amount of income inequality, all these patent laws put forward by the aff cant solve counterfeiting as they don’t affect the income inequality problem.
Jingshi (Joyce) Liu 7/01/2024 | Faculty of Management, Bayes Business School, City, University of London, London, UK | “The egalitarian value of counterfeit goods: Purchasing counterfeit luxury goods to address income inequality”, https://myscp.onlinelibrary.wiley.com/doi/10.1002/jcpy.1431 | ham
The present research demonstrates a novel driver of the growing demand for counterfeit luxury goods: perceptions of income inequality. Across five studies, using different samples and counterfeit luxury goods, we find that as perceptions of income inequality increase, consumers value counterfeit luxury products for their “egalitarian value”—a value associated with counterfeits' perceived ability to restore equality in society. Consumers perceive both public and private counterfeit luxury goods to have egalitarian value, suggesting that their value manifests itself beyond consumers' attempts to signal status via consumption. Moreover, the egalitarian value increases consumers' motivation to purchase counterfeit luxury goods beyond their hedonic, utilitarian, economic, or status signaling value. Finally, the positive effect of the egalitarian value of counterfeit luxury goods on purchase preference is greater among consumers who think equality is more desirable and attainable (i.e., those low in social dominance orientation). Our results outline one psychological mechanism underlying consumers' interests in counterfeit luxury goods, explaining how egalitarian value may link two important societal issues: growing income inequality and increased demand for counterfeits. INTRODUCTION Income inequality reflects the extent to which wealth and income are unevenly distributed across members of a society (International Monetary Fund, 2022). It can both be objectively measured (Gini, 1921) and subjectively experienced (Schmalor & Heine, 2022). Though some may recognize a persistent income gap between the rich and the poor, inequality may also be situationally salient, such as when one walks past homeless people on the way to shop in high-end boutiques or drives past mansions on the way to their social housing. Research finds that income inequality affects individuals' well-being and behaviors (Schneider, 2016), increasing concerns for fairness and equality (Oishi et al., 2011), and motivating strategies to restore equality in social institutions (Ordabayeva & Lisjak, 2022). Equality-driven motivations influence both citizenship decisions, such as endorsing tax redistribution policies (Chow & Galak, 2012; Goya-Tocchetto & Payne, 2022), and consumption decisions, such as supporting businesses that are egalitarian oriented (Acar et al., 2021; Ordabayeva & Lisjak, 2022) or rejecting businesses that perpetuate inequality (Hagerty et al., 2022). These behaviors imply that consumer ideologies—the ideas and ideals that consumers hold regarding the marketplace (Schmitt et al., 2022)—underpin decisions to reduce income inequality. The present research investigates if conditions of income inequality influence decisions to buy counterfeit luxury goods, and whether those decisions are undergirded by counterfeits' perceived ability to reduce inequality in the marketplace. THE EGALITARIAN VALUE OF COUNTERFEIT LUXURY GOODS Counterfeit luxury goods are manufactured to resemble legitimate luxury branded goods but are typically lower-priced. The global market for all counterfeit goods was estimated at $1.8 trillion USD in 2020, leading to $98 billion USD losses for luxury consumer brands specifically (Global Brand Counterfeiting Report 2018–2020, 2018). The growth of the counterfeit market is driven in large part by consumers' demand (Bloch et al., 1993), highlighting the importance of understanding factors that affect the preference for counterfeit luxury goods. We argue that an antecedent of the demand for counterfeit luxury goods is consumers' perceptions of income inequality (interchangeably: “perceived inequality”). Though income inequality restricts access to luxury markets to a few wealthy consumers (Gabszewicz & Thisse, 1979; Veblen, 1889), counterfeit luxury goods remain accessible to a wider range of “normal” consumers. By democratizing access, counterfeit luxury goods may be seen as undermining the hegemony of luxury markets (Amaral & Loken, 2016). Indeed, some consumers consider counterfeits as emblematic of the “little guys who fight big businesses” (Tom et al., 1998, p. 408). Thus, under rising income inequality, counterfeit luxury goods may level the unequal playing field of luxury markets, creating more egalitarian conditions that undermine the exclusivity of luxury goods. We term this value the egalitarian value of counterfeits. By ostensibly creating more egalitarian conditions in exclusionary luxury markets, counterfeit luxury goods provide symbolic adjustments to the structure of unfair social institutions (c.f. Borge & Rattsø, 2004; Kuziemko et al., 2015; Ordabayeva & Lisjak, 2022), allowing consumers to address inequality through consumption. Guided by consumers' ideals about the market, consumption decisions may “affirm” the market, by accepting or engaging with activities that reinforce existing conditions, or “reject” the market, by avoiding or taking actions to alter existing conditions (Schmitt et al., 2022). Rather than serving as an alternate and relatively cheap source of status-signal that “affirms” the existing hierarchy in the luxury market (Wilcox et al., 2009), we argue that counterfeit luxury goods may be used as a means of “rejecting” the existing market conditions (Schmitt et al., 2022) and resisting exclusionary institutions (Bourdieu, 1998) under rising income inequality. Supporting the posited relationship between income inequality and demand for counterfeits, we conducted a Google Search Trends analysis (2013—2022), finding positive correlations between searches for counterfeit luxury brands (e.g., “replica Rolex”, “fake Gucci”) and existing levels of income inequality (Gini coefficients) in the US states where the searches took place (ps <0.001: Methodological Detail Appendix-I; hereafter MDA-I). Motivated by this relationship, we examine whether the egalitarian value of counterfeit luxury goods is an underlying mechanism, linking income inequality to counterfeit purchases. We posit that the egalitarian value of counterfeit luxury goods increases the purchase of counterfeits. But the strength of this effect may further depend on consumers' ideologies regarding the desirability of social equality. Social Dominance Orientation (“SDO” hereafter) reflects individuals' “degree of preference for inequality among social groups” (Pratto et al., 1994, p. 741). Consumers with low [high] SDO endorse and strive for [reject or deny] equality in social structures. Accordingly, the egalitarian value of counterfeits should be more appealing to low (vs. high) SDO consumers, exerting greater effects on the purchase intentions of these consumers. Thus, we predict SDO moderates the relationship between egalitarian value and purchase of luxury counterfeits. Five studies test the effect of perceived inequality on the egalitarian value of counterfeit luxury goods (all studies), its effect on downstream purchase decisions (Studies 1B-4), and its conceptual moderator (Study 4). We address alternative explanations regarding price (Study 2) and status-signaling motives (Study 3), while demonstrating our effects using various luxury brands and products. We focus on egalitarian value, but report the results of the other values in Tables 1–7. Stimuli and pre-registrations are reported in MDA-II. Confirmatory factor analyses and correlation analyses demonstrate the construct validity of egalitarian value (MDA-III). Participants' income/SES does not moderate perceived inequality's effect on egalitarian value, nor its indirect effect on purchasing counterfeit luxury goods (MDA-IV). All data selection criteria are pre-registered, and sensitivity analyses suggest that the sample sizes across studies would detect medium-small effect sizes given adequate power (0.80). Analyses using full samples are reported in MDA-V. << TEXT SHRUNK NONE OMMITTED>> Data are available at: https://osf.io/wypb6/?view_only=19ea1b5cbe124fe282c697956b7c4f32. TABLE 1. Studies 1A–1B, Regressions on egalitarian value, using perceived inequality as the key predictor, controlling for other values. Studies 1A-1B measure perceived inequality and establish its relationship with the egalitarian value of counterfeit luxury goods, examining both counterfeit watches in a country with low income inequality (Sweden: Study 1A) and counterfeit scarfs in the U.S. (Study 1B). Participants approached by researchers in the center of a large Swedish city (N = 220) first completed a 4-item perceived inequality scale (Schmalor & Heine, 2022; α = 0.77; e.g., “Almost all the money that is earned goes to only a few people”; 1 = Not True At All, 7 = Extremely True). They then received and examined a counterfeit Rolex “Submariner” watch designed to replicate the original watch on all dimensions. They learned about the features of the replica, its cost (€250), and the legitimate Rolex's retail price (€12,000). Afterward, participants completed measures of the relative egalitarian value of a counterfeit Rolex compared to a legitimate Rolex (e.g., “Helps make life more fair”; 1 = Completely Disagree, 7 = Completely Agree), and its relative hedonic, utilitarian, economic, and status values. All scale measures are reliable across studies (all α > 0.70, see MDA-III). As pre-registered, seven men who did not complete the survey and four women were excluded, leaving N = 209 for analyses (Mage = 28.29, SD = 8.30). We regressed egalitarian value on perceived inequality, with other values as covariates. Perceived inequality positively related to the egalitarian value of the replica Rolex (b = 0.17, SE = 0.06, t(203) = 3.04, p = 0.003, r2 = 0.30: Table 1, Figure 1), supporting our predictions using an actual counterfeit watch. Study 1A, Effect of perceived inequality on egalitarian value, controlling for other values as covariates. Study 1B Study 1B builds on Study 1A in several ways: First, measuring inequality prior to rating the counterfeit (Study 1A) may have inadvertently created a demand effect. To address this issue, here, we randomized the order of the inequality measure: the Inequality First [Last] condition reported perceived inequality before [after] rating the values of a counterfeit Louis Vuitton (LV) scarf. Second, Study 1A measured values of a counterfeit luxury good relative to its legitimate counterpart. Here, we measured the values of a counterfeit in isolation. Third, we measured purchase intentions (1 = Not at All; 7 = Very Much) to understand how egalitarian value influences consumption decisions. American participants (N = 411, CloudResearch Connect) completed this study. One participant failed the attention check, leaving N = 410 for analyses (45.1% females, Mage = 39.56, SDage = 12.61). We regressed the egalitarian value of the counterfeit LV on perceived inequality (standardized), measurement order (1 = inequality first, −1 = inequality last), and their interaction, with hedonic, utilitarian, economic, and status values as covariates. We found a main effect of perceived inequality (b = 0.21, SE = 0.05, t(402) = 3.93, p < 0.001), but no effect of measurement order (b = 0.02, SE = 0.05, t(402) = 0.46, p = 0.64) or an interaction (b = −0.04, SE = 0.05, t(402) = −0.78, p = 0.44; Table 1, Figure 2). A second regression of purchase intentions on perceived inequality, order of measure, and their interaction yielded a main effect of perceived inequality (b = 0.18, SE = 0.08, t(406) = 2.09, p = 0.04) and no other effect [measurement order: b = −0.02, SE = 0.08, t(406) = −0.19, p = 0.85; interaction: b = −0.02, SE = 0.08, t(406) = −0.24, p = 0.81, Figure 3]. Thus, perceived inequality predicted the egalitarian value of and purchase intentions for a counterfeit luxury good, regardless of when inequality was measured. Study 1B, Perceived inequality by measurement order interaction on egalitarian value, controlling for other values as covariates. Study 1B, Perceived inequality by measurement order interaction on purchase intentions. Egalitarian value mediated the relationship between perceived inequality and intentions to buy the counterfeit LV scarf, both when controlling for the other values (Hayes, 2017: PROCESS Model 4, Bootstrapped sample = 5000, 95% CI = [0.039, 0.156]), and when entering all values as parallel mediators (95% CI = [0.037, 0.186]; Table 2), outlining the unique effect of egalitarian value on the purchase intentions for counterfeit luxury goods. STUDY 2: COUNTERFEIT LUXURY VERSUS NON-LUXURY We posit that counterfeit luxury goods have egalitarian value under income inequality because they undermine the exclusivity of luxury markets. However, it may simply be that all low-priced goods provide egalitarian value through their general availability compared to higher-priced goods. Study 2 tests this alternative explanation by experimentally comparing counterfeit luxury goods to non-luxury but similarly priced products. Method Participants (N = 412 Americans, CloudResearch Connect) completed a two-condition (product type: counterfeit-luxury, non-luxury) between-subjects study. We recruited female participants as our stimuli are handbags (Wang et al., 2019). Participants first completed a perceived inequality scale (as in Studies 1A–1B), then shopped for a handbag online using one of two real-world e-commerce websites embedded in the study, allowing them to browse and interact with products. The Counterfeit-Luxury [Non-Luxury] condition browsed a webpage selling a replica Gucci [a Guess] handbag. We described Gucci [Guess] as a “luxury and prestigious designer brand” [“popular fashion brand”]. Gucci was indeed pretested to be more luxurious and exclusive than Guess (MDA-VI). To keep price perceptions constant, both products were similarly priced and were “cheaper” than alternative options (the replica Gucci was cheaper than a legitimate Gucci, and the Guess was temporarily on sale; MDA-III). As in Study 1B, participants reported the egalitarian, hedonic, utilitarian, economic and status values, and their purchase intentions for the respective handbag. Eight participants failed the attention check, leaving N = 404 for analysis (Mage = 41.26, SDage = 12.87). Results and discussion We regressed egalitarian value on product type (1 = counterfeit-luxury, −1 = non-luxury), perceived inequality (standardized), and their interaction, with other v

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