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

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  • Hong Luo
  • Julie Holland Mortimer

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, 2019. "Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment," NBER Working Papers 25453, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25453
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    References listed on IDEAS

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    Cited by:

    1. Xinyu Hua & Kathryn E. Spier, 2021. "Settling Lawsuits with Pirates," HKUST CEP Working Papers Series 202104, HKUST Center for Economic Policy.
    2. 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.

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    More about this item

    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

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