Hashim, Kannan, Maximiano and Rees (2012)
|Hashim, Kannan, Maximiano and Rees (2012)|
|Title:||Digital Piracy, Teens, and the Source of Advice: An Experimental Study|
|Author(s):||Hashim, M., Kannan, K., Maximiano, S., Rees, J.|
|Citation:||Hashim, M., Kannan, K., Maximiano, S., & Rees, J. (2012). Digital piracy, teens, and the source of advice: An experimental study. Journal of Mananagement Information Studies, 31(2), 211-244.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||The experiment was conducted in the Vernon Smith Experimental Economics Laboratory at Purdue University during the summer and fall of 2011. A total of 123 subjects participated in our experimental sessions, which lasted on average 1 hour.|
|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:||
The objective of our paper is to determine the effect of piracy advice from various sources on the behavior of the music consumer. Specifically, does it matter if the source of advice has a stake in the outcome of the piracy decision? Does it matter if the source of advice has a social tie with the advisee? Accordingly, we conduct a laboratory experiment using teenagers and their parents as subjects, increasing the realism of the context by sampling potential pirates and their parents. Treatments represent various sources of piracy advice (e.g., the teen's parent, a record label, or an external regulator). Subjects make decisions playing our new experimental game—The Piracy Game—extended from the volunteer's dilemma literature. Interestingly, subjects respond negatively to advice from record labels over time, purchasing fewer songs as compared to other sources such as the subject's parent. The existence of a social tie between the adviser and the subject assists in mitigating piracy, especially when a parent is facing potential penalties due to his or her child's behavior. An external regulator, having no social tie or stake in the decision, provides the least credible source of advice, leading to the greatest amount of piracy. Our analyses not only provide managerial insights but also develop theoretical understanding of the role of social ties in the context of advice.
Main Results of the Study
- Digital good providers have tried various approaches to educate potential pirates about the implications of piracy to encourage them to purchase. Yet, there is little analysis done on the implication of the educational strategies. To fill this gap, this paper investigates the implications of the source of advice on both pirating and purchasing decisions. The study is among the first to include both parents and their children in a behavioral/experimental economics study.
- Results indicate that when there is a tangible stake for the parent for their child’s actions, purchasing behavior by the child is significantly increased, and pirating behavior is slightly decreased.
- Even when there is not a stake for the parents (e.g., potential litigation), the advice is most effective when the advisor has a stronger social tie (parent as opposed to the record label or a regulator). On the contrary, when the record label provides advice, the profit generated surprisingly results in the worst outcome.
Policy Implications as Stated By Author
Although the industry is attempting to shift to education strategies (e.g., Pyyny, 2003; RIAA, 2009, 2011a,b; Stewart-Robertson, 2010), in lieu of litigation (or technology controls for that matter), the current status quo of sending advice directly from 3rd parties could certainly be improved by coordinating advice through channels with greater social ties to the pirates.
Coverage of Study
|Level of aggregation:||Individual|
|Period of material under study:||2011|