Determinants of Consumer Willingness
to Purchase Non-Deceptive
Counterfeit Products
Irena Vida
This study offers insights into non-deceptive counterfeiting by focus-
ing on consumers in a new eu member country. More specifically, con-
sumers' inclination to purchase counterfeits at various price levels rel-
ative to retail prices of genuine branded products is examined, and the
effects of various socio-economic and socio-psychological characteris-
tics are explored. In reviewing the consumer behavior literature and re-
cent empirical work, a conceptual model of consumer general willing-
ness to purchase counterfeit products was developed. Using path anal-
yses to test the system of structural relationships among the variables,
inconsistent patterns of results were found across three classes of coun-
terfeit products. Implications for management and further research are
provided.
Key Words: counterfeit products, consumer unethical behavior,
willingness to buy, Slovenia
jel Classification: M31, M39
Introduction
Despite the efforts on the part of international trade organizations to de-
ter counterfeiting practices, product counterfeiting represents a growing
problem for legitimate producers of global branded products ranging
from pharmaceuticals to computer software and fashion merchandise.
Even in light of technological advancements facilitating recognition of
genuine products and legal pressures on illegitimate buyers and sellers,
corporations continue to incur billions of us dollars in lost sales annually
due to this problem (2005 Commercial Piracy Report 2006; Harvey and
Ronkainen 1985; Shultz and Saporito 1995; Stoettinger and Penz 2003).
According to some estimates, international trade in counterfeit prod-
ucts accounts for three to six percent of overall world trade, with trends
indicating that the counterfeit product market is booming (2005 Com-
mercial Piracy Report 2006; Delener 2000). Clearly, the consequences of
Dr Irena Vida is a Professor at the Faculty of Economics,
University of Ljubljana, Slovenia.
Managing Global Transitions 5 (3): 253-270
counterfeiting practices are not only economically devastating to manu-
facturers of genuine products and brands, but also affect hundreds of
thousand of jobs, increase the cost of marketing legitimate products,
and diminish brand equity and trademark owner reputation. Moreover,
counterfeit trade may threaten consumer health and safety such as in the
case of fake amphetamines and tranquilizers, and bogus birth control
pills (Chakraborty, Allred, and Bristol 1996).
With counterfeit merchandise cutting across various industries in
business-to-consumer and business-to-business markets in industrial-
ized and emerging economies alike, trademark infringement cannot be
ignored. Such illegal practices can be reduced by cutting into either of
the two sides in the exchange: the supply side of counterfeits or the de-
mand side for counterfeits. While the supply side of counterfeiting has
received considerable attention in the literature, investigations focusing
on the demand side are still scarce (Ang, Cheng, Lim, and Tambyah 2001;
Bloch, Bush and Campbell 1993; Dubinsky, Nataraajan, and Huang 2005;
Stoettinger and Penz 2003).
Generally, academic studies differentiate between two types of trans-
actions involving fake products, i. e., deceptive and non-deceptive coun-
terfeiting (Grossman and Shapiro 1988; Chakraborty et al. 1996). The
former represents situations in which consumers believe they have pur-
chased a genuine product when in fact it is a fake. On the other hand,
the non-deceptive counterfeits refer to situations when consumers are
fully aware (based on price, quality and the type of outlet from which
the product is purchased) that they are buying a knock-off at the time of
purchase.
This study focuses on the demand side of counterfeiting, examin-
ing consumer perceptions of non-deceptive counterfeiting in Slovenia,
one of the most successful transitional economies among the new eu
countries. There have been reports indicating that the production of
fake labels, decals and packaging has become a virtual cottage indus-
try in some Central, Southern and Eastern European (csee) markets,
with imported fake products from the Far East adding to the problem
(Al-Khatib, Robertson, and Lascu 2004). For instance, Mattel has lost
millions from fake Barbie dolls made in Russia, and the Italian alco-
holic beverages producer Martini & Rossi has sought to combat coun-
terfeits through the court system in various csee countries (Crisp 1993;
Delener 2000). While a wide range of products can be counterfeited,
consumers knowingly engage in purchasing fakes particularly in some
product categories such as luxury fashion items and computer software.
As a result, this research addresses various determinants of consumers'
attraction to lower priced counterfeits in three product-categories, two
fashion-oriented products (a branded T-shirt and a watch), and an item
of software. More specifically, consumers' inclination to purchase these
non-deceptive product counterfeits at various price levels relative to re-
tail prices of genuine branded products are examined in this exploratory
study.
Literature Review and Conceptual Framework for the Study
Various researchers have studied counterfeit practices, production and
trade of illicit goods, i. e., illegal goods freely chosen by the consumer,
and the demand side of counterfeiting. This includes criminologists, le-
gal scholars, criminal psychiatrist and sociologists studying deviant be-
havior, as well as business and marketing scholars (Albers-Miller 1999;
Dubinsky et al. 2005; Harvey and Ronkainen 1985). While the latter have
in the last decade focused primarily on the supply side of counterfeit-
ing, a renewed interest in empirical investigations of the demand side of
counterfeiting practices seems apparent since the mid-1990's, after the
renowned marketing scholar, Elisabeth Hirschman, had expressed the
need for deeper explorations of the 'dark-side' of consumer behavior.
In response, a special issue of Psychology and Marketing was published
by Budden and Griffith (1996) to study aberrant and dysfunctional con-
sumer behavior, including addictive and compulsive behavior, consumer
fraud and shoplifting.
While various theories and models attempt to explain ethical behavior
in a marketing context, studies specifically addressing determinants of il-
legal and inappropriate consumer behavior are scarce and scattered. For
instance, Ferrell and Gresham's (1985) model suggests that the decision
process individuals encounter when faced with an ethical issue (such as
in the case of a non-deceptive counterfeit product purchasing dilemma)
is affected by individual factors (e. g., knowledge, values, attitudes, and
intentions), significant others (differential association and role set con-
figuration) and opportunity (e. g., professional codes, rewards and pun-
ishments). Yet other researchers believe context specific frameworks are
needed when examining determinants of individual illicit product pur-
chases, such as in the case of software piracy (Simpson, Banerjee, and
Simpson 1994).
Despite the paucity of theoretical guidance, literature in the field and
recent empirical studies seem to suggest that various individual charac-
teristics and situational factors motivate people to willingly engage in
misbehavior such as the purchasing of fake branded products (Dubin-
sky et al. 2005; Al-Khatib et al. 2004). Price advantages of counterfeits
relative to genuine products play a major factor in consumer continu-
ing demand for counterfeit products (Bloch et al. 1993; Schlegelmilch et
al. 1998; Stoettinger and Penz 2003). Other factors underlying consumer
counterfeiting behavior suggested in the literature include a) the penalty
and sanctions associated with criminal behavior, b) direct or indirect so-
cial pressure (e. g., whether the person is conducting illegal behavior in
the presence or absence of others), c) personality traits and character-
istics of individuals, and d) the ability of participants to rationalize the
behavior (Albers-Miller 1999; Ang et al. 2001; Simpson et al. 1994; Strut-
ton et al. 1997).
Hence, against this background, we propose a conceptual model pre-
sented in figure 1, and explore consumer willingness to purchase fake
products. This focal concept is similar to the concept of willingness to pay,
which practitioners (market researchers, psychologists and economists)
use in estimating demand for private and public goods and in designing
optimal price schedules (Werterbroch and Skiera 2001, 3). In the eco-
nomic literature, willingness to pay denotes the maximum price a buyer
is willing to pay for a given quantity of a good (i. e., a ration-scaled mea-
sure of the subjective value the buyer assigns to the good). A consumer
chooses an item from a set of alternatives for which a person's willingness
to pay exceeds price the most. Similar dependent variables in examining
consumer ethical issues were used in recent studies (e. g., De Pelsmacker,
Driesen, and Rayp 2005; Stoettinger and Penz 2003). As is common in
attitude models (Fishbein and Ajzen 1975), this construct measured the
intention to purchase counterfeits and served as a proxy to predict be-
havior.
As several consumer behavior researchers suggest, consumers always
balance monetary cost on the one hand and other types of costs on the
other against perceived benefits, and there is no reason to believe that the
case of consumers contemplating the purchase of a fake product over a
genuine product would be different (Ang et al. 2001; Bloch et al. 1993).
Hence, the willingness to purchase construct in our model refers to an
individual's inclination to purchase counterfeits at various price levels
relative to retail prices of genuine branded products.
Our conceptual model suggests that consumer willingness to purchase
figure 1 Conceptual model for the study
a fake product will be a function of three underlying factors previously
identified in the literature, and believed to be category- (counterfeit
products) rather than product- specific: a) a person's attitude towards
piracy and counterfeiting, b) consumer innovativeness as a personality
trait factor, and c) consumer perception of social consequences of pur-
chasing and using fake products. In turn, these three factors are influ-
enced by consumer demographics and religious beliefs, which only indi-
rectly affect an individual's willingness to purchase counterfeits.
A person's attitudes towards piracy and counterfeiting in figure 1 refers
to the degree people are able to rationalize counterfeiting practices with
respect to the costs, pricing and quality of genuine vs. fake products. As
Gellerman (1986) suggested, one way people tend to rationalize their be-
havior is by deciding that it is not really illegal or immoral. For example,
people viewing counterfeiting simply as a result of original trade mark
holders ripping off consumers by overpricing their products, would be
more likely to purchase fakes (Schlegelmilch et al. 1998). Hence, positive
attitudes towards counterfeiting are expected to be positively related to
consumer willingness to purchase fakes.
An individual's perception of social consequences in our model is de-
fined as consumer perception of the social risks involved in purchas-
ing and using fake products. More specifically, the concept reflects an
individual's attitude towards the social effects of knowingly purchasing
fakes, i. e., the risk of being discovered to have purchased or used a fake
product. As suggested by various authors, social pressure can lead peo-
ple to either follow or break the rules, meaning that peer support of the
(mis)behavior may either encourage participation or serve as its deter-
rent (Ang et al. 2001; Albers-Miller 1999). Therefore, consumers more
concerned with the embarrassment potential of using fakes will be less
willing to purchase them. This is consistent with Ferrell and Grisham's
(1985) model of ethical behavior, which addresses the importance of ref-
erence groups, specifically peers in affecting a person's ethical behavior
in their 'significant others' variable.
Consumer innovativeness, typically thought of as a personality trait
underlying adoption of new products, was defined as an individual's pre-
disposition to use novel, unconventional products and brands or engage
in novel experiences rather than remain with previous choices and con-
sumption patterns. The literature suggests that innovativeness is 'corre-
lated positively with optimum stimulation level, independence, extraver-
sion, impulsivity, risk taking, tolerance for ambiguity, inner-directed (vs.
other-directed) social character, capacity for status, and is correlated
negatively with dogmatism, need for structure, and need for clarity.'
(Steenkamp, Hofstede, and Wedel 1999, 56). Hence, more innovative
consumers, who are willing to take risks by trying unfamiliar products,
brands, restaurants and willing to engage in new experiences, are ex-
pected to be more willing to purchase fakes. Considering the research
setting in this study (i. e., Slovenia), and the assumption that status and
luxury goods (typically subject to counterfeiting) are novel to the major-
ity of consumer segments in csee transitional economies (e. g., Reardon
et al. 2005; Rojšek 2001), the construct of innovativeness may be par-
ticularly relevant to investigations of counterfeiting behaviour in a given
research context. In previous work, Stoettinger and Penz (2003) used two
related constructs to model the demand for counterfeiting in two coun-
tries, i. e., Fashion involvement index and Readiness to take risks. They
found that the impact of these determinants varies, based on the prices
differential between original and counterfeit product, and on the prod-
uct as well as the country investigated.
Therefore, we hypothesize that consumer willingness to purchase
counterfeit products is influenced by their attitudes towards counterfeit
products, perceptions of social consequences, and by their innovative-
ness with regard to new products in general. In turn, these three factors
are influenced by consumer demographics and religious beliefs. As most
ethical behavior models and empirical studies suggest, factors endemic
to the individual such as age, gender, educational, marital status and in-
come, as well religious beliefs will impact a person's ethical dilemmas
(i. e., willingness to purchase a counterfeit product) directly or indirectly
(Al-Khatib et al. 2004; Dubinsky et al. 2005; Ferrell and Grisham 1985;
Simpson et al. 1994; Stoettinger and Penz 2003).
Not only do we hypothesize in our conceptual model that the three
socio-psychological constructs directly affect an individual's willingness
to purchase fakes, but we also postulate that innovativeness influences
the other two factors, i. e., attitudes towards piracy and perceptions of so-
cial consequences. Consistent with the literature reviewed earlier, more
innovative people are believed to have a greater ability to rationalize par-
ticular behavior (i. e., positive attitude towards piracy) and they are less
prone to conform to what is considered socially desirable in a given cul-
tural environment (i. e., perceptions of social consequences).
Research Methodology
The proposed conceptual model in figure 1 was investigated on a conve-
nience sample of 223 consumers in the advanced transitional csee econ-
omy of Slovenia. The selected country offers an interesting site for this
kind of research for the following reasons: a) a lack of research investi-
gating consumer ethical issues in transitional economies (Al-Khatib et al.
2004); b) purchasing of pirated goods continues to represent a problem,
particularly in the category of pirated software (e. g., Lu 2006; Milinkovic
2004); c) considering the size of the country, the results tender a rea-
sonable external validity of the study. As part of their study program,
senior undergraduate and part-time mba students at two major uni-
versities were asked to administer the survey in their local communities
and at work. A self-administered survey was utilized as a data collection
methodology.
The questionnaire was divided into four parts and was based on the
existing knowledge of counterfeiting, established measures in the litera-
ture (e. g., Bloch et al. 1993; Kecskes and Wolf 1993; Raju 1980; Stoettinger
and Penz 2003) and self-constructed measures. Five point Likert-type
scales were used to measure socio-psychological constructs and respon-
dents' willingness to purchase a fake at various prices levels. The scales
were anchored by '1 = strongly disagree' and '5 = strongly agree'. Demo-
graphic questions consisted of open and close-ended questions. On the
average, it took respondents approximately 12 minutes to complete the
survey.
As for demographic characteristics of our respondents, our sample
consisted of 61.8% female respondents with an average age of 28.33 years
(sd of 13.37). Less than a quarter of the sample (23.3%) had attained col-
table 1 Sample characteristics by gender
Characteristic	Men	Women
Number	85 (38.5%)	136 (61.6%)
Average age (standard deviation)	26.1 (13.0)	29-5 (13-7)
Education		
College graduate	20.7%	25.9%
Not a college graduate	79.3%	74.1%
Status		
Partnered	29.9%	43.6%
Single	70.1%	65.4%
Net monthly income		
Below national average	63.2%	62.6%
Above national average	36.8%	37.4%
lege education, and 36.75% of the respondents were married or shared a
household with a partner. Table 1 shows sample characteristics by gender.
For two-thirds of the respondents, their net monthly income was lower
than the average net monthly income in Slovenia.
Data Analyses
Analyses of data were performed in two steps. First, all Likert-scale type
statements were factor analyzed and alpha estimates computed to obtain
reliable measures of the constructs in the model. Second, path analysis
was run to test the system of structural relationships among the vari-
ables, and examine the determinants of consumer willingness to pur-
chase counterfeit products.
Consistent with the model in figure 1, the variables consisted of four
constructs, five socio-economic variables, and three measures of con-
sumer willingness to purchase fake goods. The four constructs included
attitudes towards purchasing counterfeit goods, perceived social conse-
quences of purchasing fake goods, innovativeness and religiosity. The
three measures of consumer willingness to purchase fake goods were:
a) consumer willingness to purchase a fake Lacoste shirt (wtps), b) will-
ingness to purchase counterfeit software (wtpc), and c) willingness to
purchase a fake Rolex watch (wtpw). Each wtp item consisted of three
5-point scales measuring consumer willingness to purchase a counter-
feit merchandise if it were priced below the price of the genuine brand
table 2 Construct measures
Construct (source)	Description	(1)	(2)
wtp shirt (wtps) (Stoettinger et al. 2003)	Willingness to purchase a counterfeit Lacoste shirt at various price levels relative to prices of genuine branded products.	3	0.91
wtp software (wtpc) (Stoettinger et al. 2003)	Willingness to purchase counterfeit pc soft- ware at various price levels relative to prices of genuine branded products.	3	0.92
wtp watch (wtpw) (Stoettinger et al. 2003)	Willingness to purchase a counterfeit Rolex watch at various price levels relative to prices of genuine branded products.	3	0.93
Attitudes towards piracy	Attitudes towards counterfeiting - ability to rationalize counterfeiting with respect to costs, pricing and quality of genuine vs. fake products.	6	0.70
Social consequences	Consumer perception of social risks involved in purchasing and using fakes.	4	0.73
Innovativeness (Raju 1980)	Consumer predisposition to novel and differ- ent products, brands and experiences	5	0.80
Religiousness (Kecskes and Wolf 1993)	Deep rooted religious beliefs.	5	0.93
notes Column headings are as follows: (1) number of items, (2) Cronbach's Alpha.
at a 20, 40 and 60 percent lower price. Table 2 lists the constructs, the
sources of measures, conceptual definitions, the number of items per-
taining to each construct and the associated reliability measure. For all
four constructs, the Cronbach's alphas are within the prescribed range
of Nunnally's (1978) alpha requirement for psychometric scales (0.70 or
greater).
In the second stage of analyses, path analysis was run to test the sys-
tem of structural relationships. We ran three separate models, one for
each product specific measure of consumer willingness to purchase fake
goods. Each model was specified as a recursive system with six exoge-
nous variables xi and four jointly dependent endogenous variables Yi.
The exogenous variables included the religiosity construct and the five
socio-economic variables, and the endogenous variables included con-
sumer attitudes towards piracy, perceived social consequences, the in-
novativeness construct and a willingness to purchase construct. The five
socio-economic variables tested in the model were age, sex, education,
partnered status, and income. Due to the broad range of respondents'
age and the consequently large variance, a logarithm of age was used.
Since the observations of other socio-economic categories were found
unevenly distributed in the sample, they were converted to binary vari-
ables (Bollen 1989).
The three models were identical in their set up, replacing wtps (a
counterfeit branded T-shirt) in the first model with wt?c (counterfeit
software) in the second model, and with wtpw (a counterfeit branded
watch) in the third model. Basic identification rules followed guidelines
provided by Kaplan (2000) and Bollen (1989). As several of the variables
were dichotomous, a polychoric correlation matrix was computed using
the prelis software (Joreskog and Sorbom 1996), and all estimations
were performed using Weighted Least Squares option in the lisrel 8
software.
Findings and Discussion
Consistent with traditional reporting of results when using covariance
analysis, we first report on the fit measures of the three models (wtps,
wtpc and wtpw), and then discuss the findings of the path analyses.
The measures of fit across the three models are adequate (see table 6). As
a standard measure of fit, the chi-squares (ranging between 113 and 327)
are provided. They were significant (at p < 0.001), which is consistent
with the fact that correlation rather than covariance matrices were used
in the estimation. Bollen (1989) suggests using additional measures of
fit, which are also provided in table 6. These measures (i. e., gfi, agfi,
rmsea, rmr) are within an acceptable range for all three models of wtp.
We then examined the variance in wtp explained in each model. The
amount of variance in wtp was calculated using a measure of squared
multiple correlations for the structural equations, indicating that model 1
(counterfeit shirt) performed best since significant variables in the model
explained 38 percent of the variance, followed by model 3 (counterfeit
watch) with 24 percent of variance and model 2 (counterfeit software)
with 14 percent of variance explained.
Next, results of the path analyses are discussed in three sections, fol-
lowing the conceptual model in figure 1 from left to right. For each sec-
tion, the findings for each of the three models (wtps, wtpc and wtpw)
are presented. Table 3 reports on the results of the first section, specifying
standardized total effects of socio-economic variables and the religiosity
construct on consumer attitudes towards piracy, perceived social conse-
quences and consumer innovativeness. The results indicate that religios-
table 3 Standardized total effects of socio-economic variables and the construct of
religiosity on consumer attitudes, social consequences and innovativeness
(l) (2) (3) (4) (5) (6)
Model 1: wtp T-shirt
Attitudes towards piracy	-0.25*	-0.19	-0.21f	-0.06	0.31	-0.17
Social consequences	0.09	-0.12	0.06	0.10	0.13	-0.10
Innovativeness	-0.20*	0.15	-0.05	-0.05	-0.02	0.16
Model 2: wtp software
Attitudes towards piracy	-0.17*	-0.06	-0.23*	0.32	0.25	0.10
Social consequences	0.18*	-0.31	0.05	-0.37	0.18	-0.33
Innovativeness	-0.05*	0.19	-0.06	-0.07	-0.24	0.29
Model3: wtp watch
Attitudes towards piracy	-0.15f	-0.11	-0.19	0.17	0.30	0.02
Social consequences	0.09	-0.40	0.07	-0.32	0.28f	-0.33
Innovativeness	-0.07	0.09	-0.11	-0.09	-0.20	0.31
notes Column headings are as follows: (1) religiosity, (2) age, (3) sex, (4) partner,
(5) education, (6) income. *p < 0.001. fp < 0.01.
ity was a significant predictor of respondents' attitudes toward piracy in
all three models, with the two variables being negatively related. As ex-
pected, more religious people were less able to rationalize the existence of
costs involved, pricing and quality of fakes than their less religious coun-
terparts. Religiosity seemed to have impacted the perception of social
consequences in the case of pirated software (with more religious people
more concerned by the embarrassment potential of being discovered),
but not in the case of branded fashion products (a T-shirt and a watch).
The effect of religiosity on innovativeness was significant in two models,
i. e., for the T-shirt and for computer software, but not in the model of
willingness to purchase a fake Rolex.
Contrary to our expectations, other socio-economic variables had lit-
tle effect on the three socio-psychological variables in our conceptual
model, with the exception of gender influencing respondents' attitudes
towards piracy when modeling data for T- shirt and computer software,
and the level of respondents' education on perceived social consequences
when modeling consumer willingness to purchase a fake Rolex watch.
In both models 1 and 2, men had significantly more positive attitudes
towards counterfeiting practices and were better able to justify their ex-
istence than the females in the sample. This finding is consistent with the
table 4 Standardized total effects of innovativeness on consumer attitudes
and social consequences
Model 1:	wtp T-shirt	Attitudes towards piracy	0.19*
		Social consequences	-0.29*
Model 2:	wtp software	Attitudes towards piracy	0.00
		Social consequences	-0.19*
Model 3:	wtp watch	Attitudes towards piracy	0.00
		Social consequences	-0.19*
Note *p < 0.001
evidence obtained in a recent study of buyers vs. non-buyers of a pirated
music cd in Asia (Ang et al. 2001). Furthermore, in model 3 (wtp watch)
only, education had a positive and significant effect on the respondents'
attitudes towards social consequences of buying and using a knock-off
product, with more educated respondents being more concerned with
the social consequences of being discovered should they engage in an
illicit behavior.
Focusing on the central part of our conceptual model in figure 1, we
not only hypothesized that the three socio-psychological constructs di-
rectly affect consumer willingness to purchase fakes, but also postulated
that innovativeness influences the other two factors, i. e., attitudes to-
wards piracy and perceptions of social consequences. Table 4 shows the
results of this part of the analysis for all three measures of consumer will-
ingness to purchase counterfeit merchandise. The results indicate a neg-
ative and strong relationship between innovativeness and respondents'
perception of social risks involved in purchasing and using fake products
in all three models, i. e., counterfeit T-shirt, computer software and a fake
Rolex watch. This is consistent with the existing knowledge of the asso-
ciations between personality traits and actual adoption behavior (for a
review, see Rogers 1983). Early adopters of novel products have been fre-
quently (though not always) found to have higher ability to deal with
abstractions and cope with uncertainty and risk, and they are less fatalis-
tic and dogmatic (Steenkamp et al. 1999). The discussion of adoption be-
havior in a given research context is particularly relevant as status brands,
commonly subject to counterfeiting, represent novelty to the majority
of consumers in (even advanced) transitional economies (Reardon et al.
2005; Rojšek 2001; Steenkamp and Burgess 2002).
Moreover, findings of the first model indicate that more innovative
table 5 Standardized total effects of consumer attitudes, innovativeness and social
consequences on willingness to purchase fakes
		Attitudes towards piracy	Social consequences	Innovativeness
Model 1:	wtp T-shirt	0.27*	-0.54*	0.04
Model 2:	wtp software	-0.02	-0.03	0.36*
Model 3:	wtp watch	0.14*	-0.38*	0.24*
note *p < 0.001.
people not only care less about the social consequences, but also have
a stronger ability to justify counterfeiting practices. On the other hand,
results presented in table 4 indicate that consumer innovativeness has no
bearing on respondents' attitudes towards piracy in models 2 in 3.
Finally, in the last section, we focus on direct effects of consumer at-
titudes towards piracy, innovativeness, and perceptions of social conse-
quences on respondents' willingness to purchase fakes regardless of the
product class involved (figure 1). Standardized effects of consumer at-
titudes, innovativeness and social consequences on willingness to pur-
chase fakes are presented in table 5 for all three models. The hypothe-
sized effects of consumer attitudes towards piracy and perceptions of so-
cial consequences on willingness to purchase fakes are confirmed when
modeling data for respondents' willingness to purchase a counterfeit T-
shirt and a watch (models 1 and 3), but not their willingness to purchase
counterfeit computer software (model 2). This means that respondents
with greater ability to rationalize illicit behavior and weaker perceptions
of social risks involved in purchasing and using fakes are more willing to
purchase pirated branded fashion products, but no more willing to buy
pirated software. Results in table 5 also indicate that consumer innova-
tiveness is significantly and positively related to consumer willingness to
purchase counterfeit software and a branded counterfeit watch but not
his/her willingness to purchase a fake branded T-shirt.
Conclusions and future research
This study sought to generate some insights into non-deceptive coun-
terfeiting by focusing on consumers in an advanced csee economy and
a new eu member country. In reviewing the consumer behavior litera-
ture and recent empirical studies, we identified several socio-economic
variables and religiosity that influence consumer attitudes towards coun-
terfeiting, their innovativeness and perceptions of social risks of the illicit
behavior, i. e., socio-psychological constructs which, in turn, affect con-
sumer willingness to purchase fakes. Our conceptual model was thought
of as generalizable across product categories for which consumer will-
ingness to purchase was measured, i. e., a fake branded T-shirt, a fake
branded watch and pirated computer software. Our results, however, do
not support this conjecture, as models 1, 2 and 3 do not show consistent
results across the three product classes.
The findings of modeling a fake T-shirt data indicate that consumer
willingness to purchase this product is a function of religiosity and gen-
der (indirect effects through attitudes for both variables and through in-
novativeness for religiosity), and a function of respondents' attitudes to-
wards piracy and their perceptions of social consequences. In model 1,
consumer innovativeness had only an indirect effect through the other
two socio-psychological variables. Despite the somewhat similar product
class in the third model (a pirated branded fashion product, i. e., Rolex
watch), the indirect effects of religiosity and socio-economic variables on
the wtp watch were different (i. e., impact of religiosity through the atti-
tudes only and education through social consequences variable) as were
the indirect effects of innovativeness (influenced the social consequences
only - rather than both central constructs as in model 1). Furthermore,
the differences pertained to the direct effects on wtp as-unlike in the
wtp shirt model - all three socio-psychological constructs had a signifi-
cant impact on the endogenous wtp watch variable.
Yet another pattern of results can be seen when modeling wtp pi-
rated computer software. In model 2, the indirect effects of exogenous
variables were somewhat similar to those in model 1 (wtp shirt) with
religiosity influencing wtp through all three socio-psychological vari-
ables and gender through the attitudes only. The indirect effect of in-
novativeness (through social consequences) represents a pattern of in-
fluences which is closer to that of model 3. Unlike in models 1 and 3,
consumer innovativeness was the only socio-psychological variable with
a direct effect on consumer wtp pirated computer software.
Overall, we can conclude that the patterns of findings, while incon-
sistent across the three product classes, seem more coherent for wtp
pirated fashion products (models 1 and 3) than in the case of a coun-
terfeit computer software. These findings suggest, consistent with previ-
ous research (Chakratborty et al. 1996; Stoettinger and Penz 2003) that
consumer illicit behavior tends to be product specific.
Since this study represents a preliminary attempt at studying factors
table 6 Measures of fit
Model 1 Model 2 Model 3
Chi-square (df)
Goodness of fit index (gfi)
Adjusted goodness of fit index (agfi)
Root mean square error of approximation (rmsea)
Root mean square residual (rmr)
Standardized rmr
326.9	166.7	113.1
0.98	0.99	0.99
0.96	0.98	0.99
0.23	0.16	0.12
0.12	0.09	0.07
0.088	0.08	0.06
underlying consumer counterfeiting behavior in a novel cultural envi-
ronment relative to existing empirical research (which was conducted
mainly in the us, Europe and Asia), our findings should be interpreted
with caution. Future studies should further examine the role of prod-
uct specificity in consumer illicit behavior, and possibly examine other
psycho-sociological constructs to increase the explained variance of the
models. Our findings indicate that studying direct and indirect effects of
consumer innovativeness, in particular, should yield fruitful results.
The effect of religiosity and demographic variables on the socio-
psychological variables used in this study (which were believed to indi-
rectly effect consumer wtp fakes) were often (though not unequivocally)
found to be related to consumer illicit behavior in previous research (Ang
et al. 2001; Dubinsky et al. 2005; Simpson et al. 1994; Schlegelmilch et al.
1998). Considering the inconsistent pattern of our results in modeling
consumer willingness to purchase fakes across the three product classes,
future studies should examine the direct and indirect impact of these
variables in consumer counterfeit buying behavior.
As the countries of Central, Southern and Eastern Europe (csee) con-
tinue to make progress in their evolving market economies, international
marketers and investors will have an increasing need for understand-
ing behavioral patterns and attitudes of csee consumers, particularly
in view of the reportedly increasing volume of counterfeiting practices
in the region (Al-Khatib et al. 2004; Delener 2000). As a result of dy-
namic changes in the external environment, consumers in csee transi-
tional economies have been experiencing not only a growing economic
stratification of their societies, but also altered hierarchies of consumer
values, standards and purchasing patterns (Nasierowski 1996; Vida and
Fairhurst 1998). Some of these changes include erratic switches between
higher-status foreign and often lower-priced domestic products (e. g.,
Reardon et al. 2005; Vida and Dmitrovic 2001). It is our contention that
any strategy aimed at managing the counterfeit problem should include
ways to reduce the demand for counterfeits. In order to accomplish this,
managers need to have a strong cognizance of the most effective means of
communication to be directed at the right target audience. Studies such
as this one can facilitate this understanding.
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