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The Game Theory Model of Product Counterfeiting

Author: YiHeng
Tutor: XieQingHong
School: Southwestern University of Finance and Economics
Course: Business management
Keywords: Manufacturers Fake and shoddy Game Game Model Information
CLC: F224.32
Type: Master's thesis
Year: 2008
Downloads: 161
Quote: 0
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Abstract


With China's reform and opening up, the deepening and development of market economy, the trading behavior becomes more and more complex, counterfeit and shoddy behavior also in this environment. In recent years, domestic fraud incidents continue to occur, a large number of fake and shoddy goods into the market. Since 2000, the country have dealt with a many poisonous rice, milk powder, pickles, food additives and edible oils, cigarettes, alcohol, fake seeds, fake fertilizer, poor quality steel, etc., it is not uncommon. 2004 resulting in the death of 15 infants fake milk powder case in Fuyang, Anhui, the adulterated liquor causing blindness and even death, shoddy building materials causing the bridge to collapse of a building collapse, frequent media exposure. CD audio and video market nearly 90 percent piracy rate is more typical of of counterfeit behavior concentrated and research. There are even more that some consumers favor of brand-name imitations, these products generally do not bring harm consumers and meet the interests and needs of consumers, but from some aspects, and thus despite repeated prohibitions. Current research and the introduction of the governance measures, stay revise and improve laws and regulations, strengthen external oversight of the government and improve the institutional environment. In 1999, the Ministry of Commerce in conjunction with the 12 departments of central joint implementation of the \However, due to the generation of fake and shoddy phenomenon is caused by a variety of factors, governance also involves a wide range of interests, so that many governance counterfeiting measures are nothing came. Therefore, how to more effectively put an end to counterfeit behavior academia and industry are eager to solve the problem. Counterfeiting not only cause great harm to the health of the consumer, and greatly interfere with the normal economic order, and even some of the industry has formed a \While these problems are caused by the social and the concern and attention of the relevant departments, but from the view currently part of the research and policy has been introduced mainly stay revise and improve laws and regulations, strengthen external oversight of the government, to the neglect of the other two markets subject, namely: manufacturers counterfeiters and consumers buy false motives, as well as information asymmetry between them led to the fraud and the purchase of fake phenomenon. In particular, manufacturers as individual initiative, the source of counterfeit products, is one of the important reasons for this phenomenon. First, the paper reviews the research at home and abroad, including the origin, consumers synergistic and strategic synergy plans abroad than cutting-edge research topics, from economics, information science, sociology summarizes domestic scholars in the field research status, combined with rent-seeking economics, game theory and transaction cost theory, proposed manufacturers, supplemented by analysis of consumer and government thinking. Second, starting from both manufacturers and consumers, combined with the theory of economics, information science, sociology, etc., summarized some fake reasons. From the manufacturer, and market economic reforms in the early days, as well as the various systems and regulations imperfect, they are over-eager to chase high interest short-term speculative behavior in such a profit-driven activities, they do not consciously taking up too many social resources, potentially signaled imitation of new products or services in the enterprise, resulting in the counterfeiting. , Seeking privileges and preferential lobbying power and money exchange corruption, tax evasion gold smuggling put private unproductive rent-seeking activities detrimental to social welfare is also a fake birth hotbed of shoddy behavior. From the perspective of consumers, the adverse consumer awareness of counterfeit and shoddy provides a broad space for the existence of a large number of fake and shoddy played a role in fueling. The most typical is this bad spending habits of conspicuous consumption and freeloaders psychological. In addition, the high cost of consumer advocacy virtually increase the difficulty of consumer rights, also connived at the incidence of fake and shoddy behavior. This paper argues that the most important reason is that fake and shoddy behavior of asymmetric information. As the dominant manufacturer in the transaction object or content of information, driven to earn maximum benefit, consumers will disadvantage hidden even to provide false information, consumers face no ability to distinguish treated The only trade-off between price and quality, which gave fake companies an opportunity to exploit. Information asymmetry will enhance social transaction total costs and lead to adverse selection \Again, on the basis of theoretical analysis, game theory, a comprehensive analysis of counterfeit and shoddy behavior. Established three game model to follow from the particular to the general overall analysis of ideas, starting from the perfect information static game, gradually reduce the assumed conditions, irrational infinitely repeated game to game to the incomplete information game, last reached and reality life most close to a hypothetical situation. Specifically, in each game model, set some variables, and then to determine the trend of the whole game process for possible changes in these variables, copy the dynamic equation by backward induction, Methods of real life in Manufacturers behavior. After the above analysis, we believe that the price is the most effective factor to crack down on fake and shoddy behavior, not only is the the authentic manufacturers to reduce the price of the genuine through legal means, but also increases the cost of fraud enterprise fraud. These means include: to increase the technological content of products, and to open more hidden information, use of the information asymmetry fraud would be reduced. When the genuine price and fake goods prices in line with a linear inequality a function, the counterfeit phenomenon will be suppressed. The price cuts can stimulate consumer desire to buy, the paper argues that the release this way counterfeiting market demand will lead to a downward trend. Meanwhile, when the market demand, the number of purchased product groups increased information asymmetry relative reduction of counterfeit goods will gradually withdraw from the market. The game model of this article also reveals a paradox between the objectives and results of an act that blindly increasing direct investment in crackdown is not an effective way to suppress counterfeiting, but will make actors more opportunity to indulge counterfeit behavior. I believe that the technical barriers, public awareness and industry alliances governance best manufacturers fraud prior control means.

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CLC: > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods > Operations Research in the economy > Game Theory
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