Saturday, 23 February 2013

Keeping up Appearances

Petaling Street, is actually a Chinatown that is notorious for pirated clothes and accessories in Kuala Lumpur.  While buying things from this market, prepare yourself to bargain a lot because things, like watches, clothing and all other counterfeit items, are quoted on higher prices. It is very much possible that you might get things on half or one-third of the quoted rates using right techniques of haggling.

The best part about this street is, people know that they are buying fakes still this market fascinate not only tourists but locals as well.The rise of the "fakes" market is a fact and I will admit, it is flourishing in times of recession. People buy fake to satisfy their personal need of owning designer products. But what are the factors that determine this need and should people even consider buying designer fakes?

For the purposes of this discussion, I will employ game theory. In economics we consider that for every action there is a reaction with a perceived payoff (enjoyment). In the case of fakes the reaction is the perception of society about the person carrying the fake designer handbag. Let us take things from the beginning.

Two dimensions will be discussed today. The first dimension is the human need to purchase a fake handbag. This need can be broken down in two factors: taste and showing off. The factor of taste is very subjective and can differ dramatically based on the individual. There are people that will want to buy a fake purely for functional purposes and do not care about showing off. This factor escapes the purpose of this post so I will not discuss it any further.

Showing off on the other hand, is a different story. This factor represents the people who hold fakes with the hope of capturing attention and admiration from the people around them. They believe that the fake can add to their social status.

The second dimension to determine the purchase of a fake is social status. Social status can be divided in two broad categories: high and low. People with high social status are the rich.These are the people who can afford both originals and fakes. People with low social status are the relatively poor. These are the people who can afford fakes and perhaps, after lengthy savings, they may be able to afford an original.

For the purposes of this discussion I will assume that the proportion of people in society who can tell the fake from an original is extremely small and cannot affect the social payoff.

When high status people buy fakes, society reacts by deeming the fakes to be originals. This is because society judge people based on past experience and social status. Even a fake will add to the status of the wealthy because society will reject the idea of the rich purchasing a fake.

Unfortunately, lower status people will be judged harshly by society. Even when an original designer piece is bought, society will deem it to be a fake. This is because raising one's social status is extremely difficult.This arises from the fact that no matter original or fake, society will be unwilling to accept a change of status. Gossips will be flying left and right about how fake the designer piece is, even though it may, in fact, be an original.

Have you heard the saying it is not the clothes that make the person, but rather the person that makes the clothes?

The outcome of this discussion is that in general the lower status people should avoid buying fakes for the purpose of showing off since they are judged more harshly than the higher status people. Sad but true. A reminder that purchasing a fake because of functionality or other purpose that involves personal tastes is an entirely different story.

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