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Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment

Author

Listed:
  • Hong Luo

    (Harvard Business School)

  • Julie Holland Mortimer

    (Boston College)

Abstract

Copyright infringement may result from frictions preventing legal consumption, but may also reveal demand. Motivated by this fact, we run a field experiment in which we contact firms that are caught infringing on expensive digital images. Emails to all firms include a link to the licensing page of the infringed image; for treated firms, we add links to a significantly cheaper licensing site. Making infringers aware of the cheaper option leads to a fourteen-fold increase in the ex-post licensing rate. Two additional experimental interventions are designed to reduce search costs for (i) price and (ii) product information. Both interventions—immediate price comparison and recommendation of images similar to those infringed—have large positive effects. Our results highlight the importance of mitigating user costs in small-value transactions.

Suggested Citation

  • Hong Luo & Julie Holland Mortimer, 2018. "Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment," Boston College Working Papers in Economics 971, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:971
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    References listed on IDEAS

    as
    1. Mortimer, Julie Holland & Nosko, Chris & Sorensen, Alan, 2012. "Supply responses to digital distribution: Recorded music and live performances," Information Economics and Policy, Elsevier, vol. 24(1), pages 3-14.
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    4. Hong Luo & Julie Holland Mortimer, 2017. "Copyright Enforcement: Evidence from Two Field Experiments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(2), pages 499-528, June.
    5. Steven Tadelis & Florian Zettelmeyer, 2015. "Information Disclosure as a Matching Mechanism: Theory and Evidence from a Field Experiment," American Economic Review, American Economic Association, vol. 105(2), pages 886-905, February.
    6. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2010. "Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy," Marketing Science, INFORMS, vol. 29(6), pages 1138-1151, 11-12.
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    Citations

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    Cited by:

    1. Anthony Koschmann & Yi Qian, 2020. "Latent Estimation of Piracy Quality and its Effect on Revenues and Distribution: The Case of Motion Pictures," NBER Working Papers 27649, National Bureau of Economic Research, Inc.
    2. Xinyu Hua & Kathryn E. Spier, 2021. "Settling Lawsuits with Pirates," HKUST CEP Working Papers Series 202104, HKUST Center for Economic Policy.

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    More about this item

    Keywords

    intellectual property; digital piracy; copyright; field experiment;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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