Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment / Hong Luo, Julie Holland Mortimer.

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Luo, Hong

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w25453.Publication details: Cambridge, Mass. National Bureau of Economic Research 2019.Description: 1 online resource: illustrations (black and white)Subject(s):

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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.

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Previous	nber w25450 The Insurance is the Lemon: Failing to Index Contracts /	nber w25451 The Dozen Things Experimental Economists Should Do (More of) /	nber w25452 1930: First Modern Crisis /	nber w25453 Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment /	nber w25454 Common Ownership in America: 1980-2017 /	nber w25455 Digital Cash: Principles & Practical Steps /	nber w25456 Inference on Winners /	Next

January 2019.

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.