The Wall Street Journal had a great headline: “In China, Air cheow-DAN Cries Foul.”
Saying, “I felt the need to protect my name, my identity, and the Chinese consumer,” Michael Jordan is suing the Chinese firm Qiaodan for using his name as its trademark. Pronounced cheow-DAN in Mandarin, the firm sells basketball shoes and jerseys in its 5700+ outlets.
Michael Jordan is not alone. Apple for the iPad, Hermes, and General Motors saying the Chinese name Chery Automobile was like Chevy, have also battled the Chinese to preserve their trademark rights. Soon Jeremy Lin might have the same problem. A Chinese firm paid $708 for the rights to his name from a Chinese trademark office (not Lin).
An economist would say that we have a classic free rider problem. Firms copying trademarks are benefiting from the real owner’s designs, time, quality control and reputation.
We should add that all WTO (World Trade Organization) members are required to observe trademark recognition rules in TRIPS (Agreement on Trade-Related aspects of Intellectual Property). China is a WTO member.
Sources and Resources: This FT blog has best summary of the trademark battles in China while you might find this textbook excerpt ideal for some trademark background. For more specifics on the Michael Jordan suit, this WSJ article and this Quartz article provide the details. Meanwhile, in “Sole Rights,” econlife looked at a trademark battle in the US.
Sometimes a nudge is not enough.
According to science writer Jonah Lehrer, society has to do more than “nudge” us when it wants to change our behavior. When Sacramento, California wanted to diminish energy usage by showing customers what their neighbors consumed, they hoped competition would spur results. Close to 1.5%, the decrease was slight.
Suggesting more persuasive alternatives, Carnegie Mellon behavioral economist George Loewenstein and Daniel Schwartz further discuss the “shove” we need to diminish carbon emissions. They say that the problem is the short-term/long-term trade off. Whether dealing with an attractive mortgage deal, a pastry vs. cottage cheese, or saving for retirement, many of us favor the short-term benefit.
Loewenstein and Schwartz believe that we have a “fear deficit” for climate change because our evolutionary fear system is a short-term device. We see the predator, the adrenaline surges and we run…fast. For long-term fear, we might be physiologically inadequate.
How then to get results? Loewenstein and Schwartz suggest a “shove” rather than a nudge through taxes and regulation. And then, to make the “shove” politically palatable, society could use the revenue stream appealingly.
The Economic Lesson
While psychologists cite a “fear deficit” as a cause of climate change inaction, for economists, the problem is the “free rider.” Let’s assume that Sue never turns her lights or her air conditioning off. Although her energy usage is astronomical, she assumes that her decisions will have little impact. Then, if everyone else is more environmentally disciplined, she can enjoy the benefits of their behavior. An economist would call Sue a free rider.
An Economic Question: Which “free rider” situations could you identify?