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Online Piracy and the “Longer Arm” of Enforcement

Author

Listed:
  • Debabrata Dey

    (Foster School of Business, University of Washington, Seattle, Washington 98195)

  • Antino Kim

    (Kelley School of Business, Indiana University, Bloomington, Indiana 47405)

  • Atanu Lahiri

    (Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080)

Abstract

Controlling digital piracy has remained a top priority for manufacturers of information goods, as well as for many governments around the world. Among the many forms taken by digital piracy, we focus on an increasingly common one—namely, online piracy —that is facilitated by torrent sites and cyberlockers who bring together consumers of pirated content and its suppliers. Motivated by recent empirical literature that makes a clear distinction between antipiracy efforts that restrict supply of pirated goods ( supply-side enforcement) and ones that penalize illegal consumption ( demand-side enforcement), we develop a simple economic model and discover some fundamental differences between these two types in terms of their impacts on innovation and welfare. All in all, supply-side enforcement turns out to be the “longer arm”—it has a more desirable economic impact in the long run. Our results have clear implications for manufacturers, consumers, and policy makers.

Suggested Citation

  • Debabrata Dey & Antino Kim & Atanu Lahiri, 2019. "Online Piracy and the “Longer Arm” of Enforcement," Management Science, INFORMS, vol. 65(3), pages 1173-1190, March.
    • Handle: RePEc:inm:ormnsc:v:65:y:2019:i:3:p:1173-1190
    DOI: 10.1287/mnsc.2017.2984
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    References listed on IDEAS

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