2356. Non-deceptive counterfeiting with brand dilution and network externalities: Beyond conventional beliefs
Invited abstract in session TC-53: New Trends in Game Theory VI, stream Game Theory and Mathematical Economics.
Tuesday, 12:30-14:00Room: Liberty Moot Court
Authors (first author is the speaker)
| 1. | Salma Karray
|
| Faculty of business & IT, UOIT | |
| 2. | Simon Pierre Sigue
|
| business, Athabasca university |
Abstract
Non-deceptive counterfeiting involves producing and selling counterfeit
products at lower prices without misleading consumers about their
authenticity. This practice intensifies price competition for genuine brands while contributing to brand dilution and network externalities. Using a game-theoretic approach, we analyze how manufacturers of genuine products should adjust their advertising and pricing strategies over time in response to counterfeiting. Our findings reveal that in the presence of network externalities, manufacturers should increase both advertising investments and prices to maximize profits. However, when brand dilution occurs, the optimal response depends on market conditions. In some cases, a survival strategy- reducing advertising and/or prices- may be necessary to maintain profitability, even at lower levels than in a monopoly. In other cases, a differentiation strategy- raising advertising and prices- can lead to profit gains. Regardless of the approach, manufacturers must enhance advertising effectiveness to strengthen brand differentiation, maintain competitiveness, and mitigate the negative effects of brand dilution.
Keywords
- Marketing
- Supply Chain Management
- Game Theory
Status: accepted
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