Guarding the lifeline : A game‐theoretical approach to combating emergency supplies counterfeits

Wang, Yue and Liu, Ming (2024) Guarding the lifeline : A game‐theoretical approach to combating emergency supplies counterfeits. Managerial and Decision Economics, 45 (8). pp. 5265-5279. ISSN 0143-6570

Abstract

After emergency incidents, the issue of emergency supplies counterfeiting persists. Relying solely on government intervention often falls short of preventing fraud related to emergency supplies counterfeiting. Hence, this paper explores a new anti-counterfeiting approach for emergency supplies, led by the government with legitimate manufacturers' support, and establishes a differential game model based on consumer demand, legitimate manufacturers reputation, and anti-counterfeiting efforts. Upon exploring the anti-counterfeiting efforts and benefits for two participants, and systems in three scenarios, we find that system benefits, legitimate manufacturer reputation, and respective gains for both participants are the highest in the collaboration scenario. However, compared with a no-cost-sharing scenario, the cost-sharing scenario achieves a Pareto improvement in both social welfare and legitimate manufacturer benefits, with the government choosing to share a portion of the anti-counterfeiting cost for legitimate manufacturers only under certain conditions.