Academic

The Backroom Story: Prada, Gucci, And Fendi Knockoffs On Canal Street

By Dan Filler

Here is one of those Steven Levitt Freakonomics mysteries I've been pondering recently.  As many people know, designer knockoff bags are sold by vendors on Manhattan's Canal Street.  You can walk up and down the avenue and pop into shallow shops featuring hundreds of handbags for sale.  But if you're seeking genuine fakes - leatheresque handbags that look like Prada and bear the Prada mark - you have to go a step further.  You have to enter the back room.  It's not difficult to get there.  Walk in and ask "do you have Prada?" and you're shown straight back.  In fact, in many cases, an employee will prod "are you looking for Gucci, Chanel?" and point to the back room.  The back room often isn't immediately visible.  It is protected by a closed door (often covered in merchandise like the rest of the walls) and it's staffed by an employee.  But anyone would quickly notice the traffic streaming in and out.  Any snoop with the remotest desire could discover these fakes with ease.  This setup can't possibly deceive police or corporate monitors.

Thus the Levitt question: why do these backrooms exist?  Is there some sort of formal or informal agreement between police or the trademark owners and the vendors?   Do the vendors think these rooms prevent detection?  Do vendors imagine that these rooms reduce the likelihood of active enforcement?  Or is something else going on?  Naturally, I don't have the slightest idea.  The whole process struck me as very odd - a complete charade.  But in our somewhat rational world, I suspect that there are some hard, instrumental reasons for this phenomenon.  Theories, of course, welcome.

Full post as published by The Faculty Lounge on March 17, 2008 (boomark / email).