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Internet piracy and book sales: a field experiment

Author

Listed:
  • Wojciech Hardy

    (University of Warsaw)

  • Michal Krawczyk

    (University of Warsaw
    Group for Research in Applied Economics (GRAPE)
    Group for Research in Applied Economics (GRAPE)
    University of Warsaw)

Abstract

The widespread Internet ``piracy'' continues to fuel the debate about business models impervious to copyright infringement. We studied the displacement effects of ``piracy'' on sales in the book industry. We conducted a year-long large-scale field experiment: in the treatment group, we removed unauthorized copies appearing on the Internet and observed the sales data, whereas in the control group, we simply observed sales. We were able to substantially curb the unauthorized distribution, which resulted in a small, positive effect on sales. While using classical analysis we found it not to be significantly different from zero, a Bayesian approach using previous ``piracy'' studies to generate a prior led to the conclusion that protecting from piracy resulted in a significant sales boost of about 9 percent.

Suggested Citation

  • Wojciech Hardy & Michal Krawczyk, 2023. "Internet piracy and book sales: a field experiment," GRAPE Working Papers 93, GRAPE Group for Research in Applied Economics.
    • Handle: RePEc:fme:wpaper:93
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    References listed on IDEAS

    as
    1. Brett Danaher & Michael D. Smith & Rahul Telang, 2014. "Piracy and Copyright Enforcement Mechanisms," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 25-61.
    2. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2010. "Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy," Marketing Science, INFORMS, vol. 29(6), pages 1138-1151, 11-12.
    3. Brett Danaher & Michael D. Smith & Rahul Telang & Siwen Chen, 2014. "The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 541-553, September.
    4. Tatsuo Tanaka, 2019. "The Effects of Internet Book Piracy: Case of Comics," Keio-IES Discussion Paper Series 2019-016, Institute for Economics Studies, Keio University.
    5. Adermon, Adrian & Liang, Che-Yuan, 2014. "Piracy and music sales: The effects of an anti-piracy law," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 90-106.
    6. Meyer, Erik & Van Klaveren, Chris, 2013. "The effectiveness of extended day programs: Evidence from a randomized field experiment in the Netherlands," Economics of Education Review, Elsevier, vol. 36(C), pages 1-11.
    7. David Bounies & Marc Bourreau & Patrick Waelbroeck, 2007. "Pirates or Explorers ?Analysis of Music Consumption in French Graduate Schools," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 50(2), pages 167-192.
    8. Danaher, Brett & Smith, Michael D., 2014. "Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 1-8.
    9. Peukert, Christian & Claussen, Jörg & Kretschmer, Tobias, 2017. "Piracy and box office movie revenues: Evidence from Megaupload," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 188-215.
    10. Arthur Vany & W. Walls, 2007. "Estimating the Effects of Movie Piracy on Box-office Revenue," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(4), pages 291-301, June.
    11. Peukert, Christian & Claussen, Jörg & Kretschmer, Tobias, 2013. "Piracy and Movie Revenues: Evidence from Megaupload. A Tale of the Long Tail?," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79697, Verein für Socialpolitik / German Economic Association.
    12. Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115(1), pages 1-42.
    13. Imke Reimers, 2016. "Can Private Copyright Protection Be Effective? Evidence from Book Publishing," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 411-440.
    14. Zhong Zhao, 2004. "Using Matching to Estimate Treatment Effects: Data Requirements, Matching Metrics, and Monte Carlo Evidence," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 91-107, February.
    15. Emmi Martikainen, 2014. "Does file-sharing reduce DVD sales?," Netnomics, Springer, vol. 15(1), pages 9-31, July.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The effect of piracy on sales
      by nawmsayn in ZeeConomics on 2014-11-05 20:15:53

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    Cited by:

    1. Wojciech Hardy, 2020. "Effects of piracy on the American comic book market and the role of digital formats," IBS Working Papers 01/2020, Instytut Badan Strukturalnych.
    2. Tatsuo Tanaka, 2016. "The Effects of Internet Book Piracy: The Case of Japanese Comics," Keio-IES Discussion Paper Series 2016-027, Institute for Economics Studies, Keio University.
    3. Hardy, Wojciech, 2021. "Displacement from piracy in the American comic book market," Information Economics and Policy, Elsevier, vol. 57(C).
    4. Kanazawa, Kyogo & Kawaguchi, Kohei, 2022. "Displacement effects of public libraries," Journal of the Japanese and International Economies, Elsevier, vol. 66(C).
    5. Imke Reimers, 2016. "Can Private Copyright Protection Be Effective? Evidence from Book Publishing," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 411-440.

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    More about this item

    Keywords

    digital piracy; copyright infringement; sales displacement; books; field experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • 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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