Invisible Influence (17 page)

Indeed, when we asked fashion students to estimate the price of the bags, they didn't have the same difficulty Matt did. Not only could they accurately estimate the price of the logoed bags,
but they could distinguish among the subtly marked bags. Even without large logos, they could separate the expensive bags from the cheap ones.

Rolexes are a widely recognized status symbol. But because of that, true watch aficionados usually prefer something a bit more under the radar. A Vacheron Constantin will be invisible to most people, but other watch lovers will detect the signal and admire the choice.

Remember that plain-looking bag Matt thought was $15? It's actually a $6,000 Bottega Veneta. But while most regular students missed the subtle signals, true fashionistas recognized the brand right away.

And this brings us to the benefits of counterfeiting.

If you've never seen a Louis Vuitton trash bag, you're in for a treat.

No, not Louis Vuitton's Raindrop Besace, a $1,960 waterproof purse that looks like it's made of trash bag material. A real trash bag. One designed for taking out the trash.

These brown bags, adorned with LV's famous gold quatrefoil-and-flowers pattern, are the perfect gift for any friend who prefers the finer things in life. For the person who thinks his or her trash is better than everyone else's.

But before you wonder what the world is coming to, take a closer look. Notice that the bag is missing the distinctive “LV” initials that make up the standard monogram design. Look closer and you'll see that the initials on the bag actually read “VO.”

These bags aren't made by Louis Vuitton at all. They're fake.

From Louis Vuitton to Lego, and Rolex to Ray-Ban, nearly 10 percent of worldwide trade is in fake goods.
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Half a trillion dollars a year that should be going to major companies and brands is instead going to criminals. That's more than the annual production of Norway, Poland, or Belgium. In America alone, counterfeiting costs businesses more than $200 billion a year. In the late 1990s, lighter company Zippo lost one-third of its revenue to counterfeiters.

But it's not just lost revenue. As consumers experience quality issues with fake goods, brand reputations suffer. As counterfeit items proliferate, exclusivity erodes. And the availability of cheap alternatives hurts consumers' willingness to pay full price for a brand's legitimate offerings.

Visit any major port around the world and you'll see the extent of the problem. Shipping containers labeled
HOME AND GARDEN
are filled with thousands of fake handbags. Material that should
be for building supplies ends up being boxes upon boxes of counterfeit sneakers.

The Internet has only facilitated distribution. Now counterfeiters sell direct to consumers. Customs officials try to shut down websites that facilitate these transactions, but new ones pop up quickly. And it's not just small fly-by-night operations, either. A 2008 study found that almost all Louis Vuitton bags and Dior perfumes sold on eBay were fake.
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Eight in ten products that look like they are from Tiffany & Co. were actually counterfeit. It's an ocean of illegal goods.

Not surprisingly, fashion companies have worked hard to deter counterfeiters. Some brands, like Louis Vuitton, try to trademark designs like their repeating “LV” pattern. Other companies develop products that are harder to imitate. Dolce & Gabbana uses a complex anti-counterfeiting system that includes a certificate of authenticity, a heat-impressed hologram, and a safety seal made with thread that reacts to ultraviolet light.

When all else fails, companies take legal action, going after the counterfeiters themselves and the retailers and websites that carry fake products. In 2004 alone, the luxury conglomerate LVMH spent $20 million to battle the black market, conducting more than six thousand raids and more than eight thousand legal actions worldwide.
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In sum, fashion brands do a lot to avoid piracy. Because they think it is bad for their business.

But could counterfeiting actually be a good thing? Might brands actually benefit from the existence of fakes?

When two law professors looked into this question, they found that the answer was counterintuitively yes.
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And the reason had everything to do with identity signaling.

People, particularly fashion-conscious ones, care about what
their clothes communicate about them. They want to be in fashion, or at least not wear something out of style.

But, if the signal value of styles never changed, people would never need to buy anything new. They could just keep wearing the same Ugg boots or skinny ties year after year. If Ugg boots and skinny ties always signaled cool, people would have no reason to exchange those items for something else. People could keep wearing the same stuff until it wore out.

This arrangement might make most consumers happy, but retailers and manufacturers probably wouldn't feel the same way. Revenues would drop and jobs would be lost.

Enter counterfeiters to save the day.

By making and distributing knockoffs, piracy speeds obsolescence. Inferior copies may tarnish the original article, but, by broadening availability, counterfeits also change what it means to wear a style or brand. If anyone can buy what looks like this season's Louis Vuitton bag, then the signal sent by carrying the bag erodes. As the discount prices allow the bag to diffuse widely, it no longer signals exclusive or trendsetter. Instead it comes to signal mass market or fashion follower. And, as a result, true fashionistas diverge and buy something new.

Language works the same way. Teenagers start using words like “yolo” or “dip.” Eventually their parents adopt the phrases to seem cool or hip. But adoption by outsiders changes the meaning. What once signaled cool starts to signal trying too hard. So teens abandon the phrase. And by the time Grandma starts saying she's ready to dip out from Thanksgiving dinner, everyone has moved on to something else.

Companies want to show they're ahead of the curve, so they glom on to management styles like Six Sigma and total quality management. Big or successful companies breed imitators, so
smaller firms start copying anything they see “innovative” firms doing. But once enough imitators have copied, these approaches lose their value as signals that the firm is a pioneer. So firms that want to stand out have to move on.

Consequently, identity-signaling drives things to both catch on and die out. Some small set of early adopters start saying a particular phrase or using a particular management practice. If the early adopters are seen as cool, innovative, or desirable, others imitate them to try to signal the desired identity. And as more and more people flood in, the phrase, management practice, or other cultural item catches on and starts to become popular.

But once these later adopters jump in, the signal starts to change. What once was a signal of being cool or innovative starts to shift and signal something else. So the early adopters abandon the item to avoid signaling an undesired identity. Which only speeds up the signal change. Eventually, even the later adopters abandon the item as the original desired meaning has been lost. What was once popular is now the opposite.

Fashion cycles happen often, but counterfeiting helps speed the process. By ensuring its distribution, counterfeiting encourages fashions to die. But in so doing, piracy keeps consumers clamoring for new ones. As Shakespeare once quipped, “The fashion wears out more apparel than the man.”

While minority students avoiding achievement or people not getting medical care because of signaling concerns is disheartening, the silver lining is that these same concepts, when applied correctly, can be used to encourage good decisions.

Public service announcements, particularly in the health domain, often focus on information. Antismoking ads talk about the negative health effects of lighting up, and antidrug campaigns encourage parents to “talk to your kids about the dangers of drugs.” The notion is that information will change people's minds. Tell people about the negative consequences of smoking, drugs, or unhealthy eating, and they'll come around and do the right thing.

Unfortunately, more information doesn't always lead to better decisions. Teens who smoke know about the risks, but they do it anyway. Kids know that candy and chips are bad for them, but that still doesn't change their behavior.

Associating desired behaviors with aspiration groups, or desired identities, is often more effective. Popeye always ate spinach to make himself strong, and this association is believed to have boosted U.S. spinach consumption by a third.
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Advertisers have long recognized this, linking stars like Michael Jordan with everything from shoes to food to soft drinks. Want to be like Mike? This product will help. If someone people idolize is doing something, they'll want to do it as well.
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Undesired identities can be equally effective. Binge drinking is a huge problem on college campuses. Students often drink more
than they should, resulting in a variety of accidents and health issues.

To try and combat this problem, behavioral scientist Lindsay Rand and I shifted the identity some students associated with drinking.
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We went to college dormitories and put up posters featuring a geeky-looking guy (a cross between a hip-hop wannabe frat guy and the skipper from
Gilligan's Island
) holding a drink. The posters reminded students to “think when you drink, no one wants to be mistaken for this guy.” By linking binge drinking to an identity students did not want to be associated with, we hoped to shift their behavior.

And it worked. Compared to other students shown posters with traditional information-based appeals (e.g., 1,700 college students die each year from alcohol related injuries, so “think when you drink, your health is important”), students who saw the posters linking binge drinking to an undesired identity reported drinking 50 percent less alcohol.

We used the same idea to get people to eat healthier. We approached patrons at a local restaurant and reminded some of them that a group they tended not to want to look like consumed a lot of junk food. People chose healthy salads instead of greasy burgers when junk food was associated with an identity they didn't want to signal. Shifting the signal helped health.

Similar identity-based interventions can be beneficial in a variety of contexts. When speaking about the negative effects of “acting white,” President Obama said that America needed to “eradicate the slander that says a black youth with a book is acting white.”

But changing the stereotype requires more than just changing
what people say. It requires shifting the identity associated with academic achievement to one that more clearly features minority students.

In predominantly African-American schools, the negative link between academic achievement and social status is naturally weaker. Because most of the best-performing students in these schools are African-American, it diffuses any notion that doing well is acting white. Seeing black student after black student doing well makes it hard to think that doing well is a white thing.

Well-designed programs can also shift these signals. In the case of women and science, technology, engineering, and math, it can be as simple as slightly changing the environment. Women were much more interested in enrolling in a computer class when the classroom was decorated with general-interest magazines, plants, and other neutral décor (rather than stereotypically male things like
Star Wars
posters and science fiction books) or when they interacted with a computer science major who wore regular clothes (rather than a shirt that said
I CODE, THEREFORE I AM
). The neutral environment or nonstereotypical interaction partner increased women's sense of belonging, making them feel like they fit in.
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Drawing attention to academically successful minority students, particularly those who are seen as popular, should have similar effects for race. The identity associated with a particular behavior or action is often just as important as the more “functional” value it provides.
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Stigma-associated signals are particularly important for understanding health risk perception. The more susceptible people think they are to a disease, the more likely they are to get tested and change their behavior. Yet adding a stigmatized reason (e.g., unprotected sex) to a list of potential ways to catch a disease makes people paradoxically
less
likely to think they could have
contracted the disease and less likely to get tested. Compared to people who were told the disease could be contracted in three non-stigmatized ways (e.g., exposure to a crowd), adding a stigmatized way to the list made people 60 percent less likely to think they were at risk for the disease. Adding an additional way to contract the disease should only
increase
risk of exposure (there are now more ways to get it), yet people felt less comfortable admitting vulnerability because the added cause carried stigma.
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