In this paper, we study theoretically how luxury goods can signal wealth in the presenceof high-quality, low-price counterfeits. We show that when high-quality, low-price counterfeitsexist and are visibly indistinguishable from the authentic products, the classic Veblen thesisbreaks down where...

We study how luxury brands can use product line expansion as a strategy when facing a threat from the counterfeit market. Consumers who are status-conscious consider the benefits and costs of buying luxury items in order to strengthen the beliefs of others about their status. Our findings...