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Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-Strike (Hadopi) Law

  • MICHAEL ARNOLD

    ()

    (Department of Economics,University of Delaware)

  • ERIC DARMON

    ()

    (CREM, University of Rennes)

  • SYLVAIN DEJEAN

    ()

    (CREM, LR-MOS, University of La Rochelle)

  • THIERRY PENARD

    ()

    (CREM, University of Rennes 1 & University of Delaware)

Most developed countries have tried to restrain digital piracy by strength- ening laws against copyright infringement. In 2009, France implemented the Hadopi law. Under this law individuals receive a warning the first two times they are detected illegally sharing content through peer to peer (P2P) networks. Legal action is only taken when a third violation is detected. We analyze the impact of this law on individual behavior. Our theoretical model of illegal be- havior under a graduated response law predicts that the perceived probability of detection has no impact on the decision to initially engage in digital piracy, but may reduce the intensity of illegal file sharing by those who do pirate. We test the theory using survey data from French Internet users. Our econometric results indicate that the law has no substantial deterrent effect. In addition, we find evidence that individuals who are better informed about the law and piracy alternatives substitute away from monitored P2P networks and illegally access content through unmonitored channels.

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File URL: http://www.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2014/UDWP2014-07.pdf
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Paper provided by University of Delaware, Department of Economics in its series Working Papers with number 14-07.

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Length: 36 pages
Date of creation: 2014
Date of revision:
Handle: RePEc:dlw:wpaper:14-07.
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Web page: http://www.lerner.udel.edu/departments/economics/department-economics/

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  1. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 63-90, April.
  2. Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115, pages 1-42.
  3. Brett Danaher & Michael D. Smith & Rahul Telang, 2013. "Piracy and Copyright Enforcement Mechanisms," NBER Working Papers 19150, National Bureau of Economic Research, Inc.
  4. Rob, Rafael & Waldfogel, Joel, 2006. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 29-62, April.
  5. Lance Lochner, 2003. "Individual Perceptions of the Criminal Justice System," NBER Working Papers 9474, National Bureau of Economic Research, Inc.
  6. Bhattacharjee, Sudip & Gopal, Ram D & Lertwachara, Kaveepan & Marsden, James R, 2006. "Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 91-114, April.
  7. Adermon, Adrian & Liang, Che-Yuan, 2010. "Piracy, Music, And Movies: A Natural Experiment," Working Paper Series 2010:18, Uppsala University, Department of Economics.
  8. 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.
  9. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  10. Davis, Michael L, 1988. "Time and Punishment: An Intertemporal Model of Crime," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 383-90, April.
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