Did Ramalinga Raju and Bernie Madoff wear fake Rolex watches? Possibly. Here’s why: The latest research states that wearing fake luxury brands increases the likelihood of acting dishonestly.

In one of a series of experiments, three researchers asked 85 females to choose a pair of branded sunglasses from a box. Half the group was told that the shades they had picked were fake while the other half was told that they had chosen authentic Chloé sunglasses. In truth, all the sunglasses were authentic Chloé ones that retailed for $400 (around Rs18,520) a pair. The participants were then given a series of tests: filling a matrix, assessing the number of dots in a square, problem solving, things like that. Around 70% of those who thought that they were wearing fake sunglasses cheated on their tests, while 30% of those who believed they were wearing real Chloés cheated.

Acting dishonestly: It is possible that Satyam’s Ramalinga Raju wore fake Rolexes. Madhu Kapparath / Mint

Most people buy fake luxury goods for aspirational reasons. They want to appear richer and more sophisticated than they are. Gino, et al, call this the “counterfeit self" which falls prey to mixed signals. You carry a fake Gucci bag because you think it sends “positive signals" to the world when in fact you are sending “negative signals to the self", they say.

Also Read Shoba’s previous Lounge columns

Fakes have existed since 200 BC. If you walk into the Museum of Counterfeiting in Paris, you will see fake wine stoppers that were used to transport wine from Italy to Gaul two millennia ago. The original wine stopper with the merchant’s inscription is shown beside the fake one, presumably created by a nefarious merchant who wanted to cash in on the original wine brand to sell his inferior varietal. Today, luxury brands are waging a battle against the $600 billion counterfeit industry that extends from Silk Alley in China to the Stadium Market in Warsaw, Poland, to the inside of a car boot (trunk) in New York City where the sirens of Sex and the City once admired a Hermes knock-off bag. According to Tim Phillips in his book, Knockoff: The Deadly Trade in Counterfeit Goods, the same factories that produce the originals occasionally introduce a “ghost shift" that produces fakes using poorer quality ingredients but using the same casts and prototypes. Just google “handbag replicas" and you will find scores of vendors selling bags by every designer from Marc Jacobs to Balenciaga at prices that can knock you off your chair. Balenciaga bags, however, aren’t the best-sellers in the fake handbag industry. That cachet goes to the brands with logo overdose: Louis Vuitton, Gucci and Fendi.

The luxury industry has been combating fakes for decades without much success. The original strategy was to use legislation and trade sanctions. That failed abysmally, just as the music industry’s court injunctions against file-sharing companies like Napster and LimeWire has failed. Now luxury brands are trying to go to the source: the buyers. They want to figure out why people buy fakes and then try to mess with their motivations. As a result, there have been scores of papers, usually published in consumer or marketing journals, about why people buy counterfeit products. Most of these hark back to seminal studies by psychologist Daniel Katz who pretty much created the field of organizational psychology. Katz’s functional theory of attitudes states that we hold certain positions or attitudes because they advance our goals. Some attitudes help us learn (knowledge); others help us organize our world (utilitarian); some help us deny discomfiting aspects of ourselves (ego defensive). If your colleague or landlord is an arrogant jerk, he or she may be using this ego-defensive attitude to cover up an inferiority complex, according to Katz.

Luxury brands are concerned with two of Katz’s functional attitudes: social adjustive and value expressive. Social adjustive implies that we buy fakes to fit in socially with a class wealthier than ours. Value-expressive means that we carry brands because they express who we think we are. The woman of substance might favour clothes by Erdem (worn by Sarah “Mrs Gordon" Brown) and Jason Wu (Michelle Obama). The career woman who wants to be seen as both discreet and perfectionist might wear the Swiss label, Akris. Those wanting to sport ethnic Indian chic might choose Sabyasachi, while the green liberal who wants to patronize local crafts (me) might wear a khadi outfit by Soumitra Mondal (profiled by Lounge two years ago).

Social scientists believe that one way to combat counterfeiting is to use these social attitudes to nudge people away from buying fakes. For example, do consumers buy fake Gucci bags mainly for the prominently displayed horse-bit logo? If so, what if you toned down the logo or made it more discreet like Bottega Veneta’s weave? A logo-less Gucci might make it less appealing to the housewife who buys fakes in China or Chennai. But it might also make the genuine article unattractive to the freshly minted Princeton graduate who wants to impress her new boss by waltzing into work with a logo-strewn Gucci bag. After all, the reason that a young Turk at Wipro buys a Mercedes-Benz is not because he understands the intricacies of its engine but to show the world that he has arrived. A toned-down logo would dilute the brand value of a Gucci bag, just as a Benz without its inverted Y would be meaningless to a ladder-climbing executive. Those are the dilemmas that Bernard Arnault and Yves Carcelle have to sort out.

The simplest reason for not buying counterfeit brands is not only because fakes might engender a counterfeit self and cause you to cheat on your spouse. It is because of what Shakespeare said. However perfectly replicated, even if nobody can tell the difference, one person can: you. And in the words of the bard: “To thine own self be true."

Shoba Narayan carries a hand-stitched green sling bag that she bought from

Vanastree, a cooperative in Bangalore, for Rs100. Write to her at thegoodlife@livemint.com