Luo and Mortimer (2018)
|Luo and Mortimer (2018)|
|Title:||Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment|
|Author(s):||Hong Luo, Julie Holland Mortimer|
|Citation:||Luo, H. And Mortimer, J.H. (2019) Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment . NBER Working paper No. 25453.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||Data was gathered from a field experiment conducted in conjunction with a stock-image agency. Consisting of two control groups and four treatment, participants (firms) were selected based on whether they had used expensive infringing images on commercial sites (totalling 7,407 cases). Thereafter, emails were issued to these firms which either included, or did not include, links to (cheaper) micro-licensing options for the use of those infringing images (and in one treatment group contained e.g. recommended images). Thereafter, the stock-image agency monitored their website to check whether licensing options were effective.|
|Data Type:||Primary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
“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.”
Main Results of the Study
The likelihood of licensing increases positively where infringing users are made aware of licensing options. This increases fourteen times where infringing users are made aware of cheaper micro-stock licensing options (though importantly this does not extend to premium licensing options). This increases the average revenue per case by 60%. Furthermore, by adding the use of recommended alternative images, this also increases the likelihood of licensing by 45%. The authors attribute the likelihood to licence with options which reduce the search costs for users (e.g. by providing readily available payment information, or alternative and cheaper image options).
Policy Implications as Stated By Author
Whilst the authors do not make any explicit policy recommendations, they do highlight the need for reducing user search and transaction costs for digital goods (which encourages the use of licensing options as opposed to infringement). In combination, they recommend:
• The clarification of legal obligations.
• Raising awareness of purchasing options.
• Mitigation of search and transaction costs by including readily available price information, or links to alternate images.