Working Paper: NBER ID: w25453
Authors: 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.
Keywords: No keywords provided
JEL Codes: O30; O33; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increasing awareness of a cheaper licensing option (L17) | Increase in licensing rate among infringing users (D45) |
| Awareness of cheaper microstock licensing site (D49) | Increase in licensing rate from 0.17% to 2.63% (D45) |
| Recommending similar images (Y90) | Increase in probability of licensing a microstock image (D45) |
| Providing premium price information (D49) | Increase in licensing rate (D45) |
| Reducing search costs (D83) | Increase in licensing rates (D45) |
| Infringing use provides valuable information about demand (D45) | Increase in legal consumption (K49) |