Implications of counterfeiting and differentiation on online knowledge services with suitability upgrades

Abstract

The simplicity of duplicating electronic products significantly disrupts the knowledge service environment, exacerbating the issue of copyright infringement. This study focuses on the suitability upgrading of online knowledge services, examining the effects of the presence of counterfeiters and the enhancement of service differentiation on platform performance. By considering a hypothetical scenario without counterfeiters as a benchmark, this paper evaluates the impact of differentiation strategies in the presence of counterfeiters. The findings suggest that a differentiation strategy can concurrently increase market share and profit, potentially enhancing the platform's performance in scenarios involving counterfeiters. Through the analysis of two distinct periods, it was discovered that piracy possesses a unique advertising effect that can boost the platform's market share in the second period. Furthermore, strategies to combat piracy can effectively leverage this effect. While the presence of counterfeiters reduces the number of purchasers, the platform's efforts to combat piracy may increase the overall consumer surplus. Conversely, a tepid response to piracy could diminish the consumer surplus generated by legitimate purchases.