An experimental study on the sale of counterfeit products under monitoring policies

This study examines the decision behaviour of a seller who may sell either a genuine product or a deceptive counterfeit product under a monitoring policy characterised by an inspection frequency and a penalty level. A unique feature of selling deceptive counterfeit products is that the seller incurs significant losses when the deceptive counterfeit product is inspected, but enjoys significant gains if it is not. We conduct a laboratory...