IDEAS home Printed from https://ideas.repec.org/p/ibt/wpaper/wp082020.html
   My bibliography  Save this paper

Consumer switching costs in a market with legal and pirate providers

Author

Listed:
  • Wojciech Hardy

Abstract

Despite a rich literature on switching costs in traditional markets, little has been said on the context of competition between pirate and legal providers. With a sizeable literature on the effects of piracy and its determinants, it is crucial to understand the specific barriers that may prevent consumers from diverting to unauthorised consumption in the first place. Basing on existing switching cost typologies, literature on piracy and new empirical evidence, I provide a first thorough categorisation of different switching costs in a market with legal and pirate providers. I discuss the implications for consumer retention strategies.

Suggested Citation

  • Wojciech Hardy, 2020. "Consumer switching costs in a market with legal and pirate providers," IBS Working Papers 08/2020, Instytut Badan Strukturalnych.
    • Handle: RePEc:ibt:wpaper:wp082020
    as

    Download full text from publisher

    File URL: https://ibs.org.pl/app/uploads/2020/07/Consumer-switching-costs-in-a-market-with-legal-and-pirate.pdf
    File Function: English Version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mateja Kos Koklic & Monika Kukar-Kinney & Irena Vida, 2016. "Three-Level Mechanism of Consumer Digital Piracy: Development and Cross-Cultural Validation," Journal of Business Ethics, Springer, vol. 134(1), pages 15-27, March.
    2. Lixuan Zhang & Wayne W. Smith & William C. McDowell, 2009. "Examining Digital Piracy: Self-Control, Punishment, and Self-Efficacy," Information Resources Management Journal (IRMJ), IGI Global, vol. 22(1), pages 24-44, January.
    3. Chiang, Eric P. & Assane, Djeto, 2008. "Music piracy among students on the university campus: Do males and females react differently?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(4), pages 1371-1380, August.
    4. Hailiang Chen & Prabuddha De & Yu Jeffrey Hu, 2015. "IT-Enabled Broadcasting in Social Media: An Empirical Study of Artists’ Activities and Music Sales," Information Systems Research, INFORMS, vol. 26(3), pages 513-531, September.
    5. Cox, Joe & Collins, Alan, 2014. "Sailing in the same ship? Differences in factors motivating piracy of music and movie content," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 50(C), pages 70-76.
    6. Cheolho Yoon, 2011. "Theory of Planned Behavior and Ethics Theory in Digital Piracy: An Integrated Model," Journal of Business Ethics, Springer, vol. 100(3), pages 405-417, May.
    7. Mastrorocco, Nicola & Minale, Luigi, 2018. "News media and crime perceptions: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 165(C), pages 230-255.
    8. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 63-90, April.
    9. 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.
    10. Birgitte Andersen & Marion Frenz, 2010. "Don’t blame the P2P file-sharers: the impact of free music downloads on the purchase of music CDs in Canada," Journal of Evolutionary Economics, Springer, vol. 20(5), pages 715-740, October.
    11. Jones, Michael A. & Mothersbaugh, David L. & Beatty, Sharon E., 2002. "Why customers stay: measuring the underlying dimensions of services switching costs and managing their differential strategic outcomes," Journal of Business Research, Elsevier, vol. 55(6), pages 441-450, June.
    12. Timothy Cronan & Sulaiman Al-Rafee, 2008. "Factors that Influence the Intention to Pirate Software and Media," Journal of Business Ethics, Springer, vol. 78(4), pages 527-545, April.
    13. Borja, Karla & Dieringer, Suzanne, 2016. "Streaming or stealing? The complementary features between music streaming and music piracy," Journal of Retailing and Consumer Services, Elsevier, vol. 32(C), pages 86-95.
    14. Lucia Rizzica & Marco Tonello, 2015. "Exposure to media and corruption perceptions," Temi di discussione (Economic working papers) 1043, Bank of Italy, Economic Research and International Relations Area.
    15. Ian Phau & James Ng, 2010. "Predictors of Usage Intentions of Pirated Software," Journal of Business Ethics, Springer, vol. 94(1), pages 23-37, June.
    16. Brynjolfsson, Erik & Dick, Astrid Andrea & Smith, Michael D., 2004. "Search and Product Differentiation at an Internet Shopbot," Working papers 4441-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rożynek, Satia & Hardy, Wojciech, 2023. "Incentivising ‘pirates’ to pay – An experiment with comic book readers," Information Economics and Policy, Elsevier, vol. 64(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ciprian-Marcel Pop & Andreea–Ioana Romonti-Maniu & Monica-Maria Zaharie, 2017. "Opportunistic Consumer Behaviour in the Context of Digital Piracy," MIC 2017: Managing the Global Economy; Proceedings of the Joint International Conference, Monastier di Treviso, Italy, 24–27 May 2017,, University of Primorska Press.
    2. Marc Bourreau & Marianne Lumeau & Francois Moreau & Jordana Viotto da Cruz, 2019. "Recent or Free? An Experimental Study of the Motivations for Pirating Movies," CESifo Working Paper Series 8036, CESifo.
    3. Shijie Lu & Xin (Shane) Wang & Neil Bendle, 2020. "Does Piracy Create Online Word of Mouth? An Empirical Analysis in the Movie Industry," Management Science, INFORMS, vol. 66(5), pages 2140-2162, May.
    4. 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.
    5. Jonathan Dörr & Thomas Wagner & Alexander Benlian & Thomas Hess, 2013. "Music as a Service as an Alternative to Music Piracy?," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 5(6), pages 383-396, December.
    6. Godwin Udo & Kallol Bagchi & Moutusy Maity, 2016. "Exploring Factors Affecting Digital Piracy Using the Norm Activation and UTAUT Models: The Role of National Culture," Journal of Business Ethics, Springer, vol. 135(3), pages 517-541, May.
    7. Tyrowicz, Joanna & Krawczyk, Michal & Hardy, Wojciech, 2020. "Friends or foes? A meta-analysis of the relationship between “online piracy” and the sales of cultural goods," Information Economics and Policy, Elsevier, vol. 53(C).
    8. Mateja Kos Koklic & Monika Kukar-Kinney & Irena Vida, 2016. "Three-Level Mechanism of Consumer Digital Piracy: Development and Cross-Cultural Validation," Journal of Business Ethics, Springer, vol. 134(1), pages 15-27, March.
    9. Lee, Byung & Paek, Seung Yeop & Fenoff, Roy, 2018. "Factors associated with digital piracy among early adolescents," Children and Youth Services Review, Elsevier, vol. 86(C), pages 287-295.
    10. Wojciech Hardy & Michal Krawczyk & Joanna Tyrowicz, 2015. "Friends or foes? A meta-analysis of the link between "online piracy" and sales of cultural goods," Working Papers 2015-23, Faculty of Economic Sciences, University of Warsaw.
    11. Karla Borja & Suzanne Dieringer, 2022. "Is music piracy over? Comparing music piracy attitudes and behaviors between young generations," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 899-924, June.
    12. Koay, Kian Yeik & Tjiptono, Fandy & Sandhu, Manjit Singh, 2020. "Digital piracy among consumers in a developing economy: A comparison of multiple theory-based models," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    13. Scott Hiller, R., 2016. "Sales displacement and streaming music: Evidence from YouTube," Information Economics and Policy, Elsevier, vol. 34(C), pages 16-26.
    14. Malgorzata Ciesielska & Dariusz Jemielniak, 2022. "Fairness in digital sharing legal professional attitudes toward digital piracy and digital commons," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 73(7), pages 899-912, July.
    15. Luis Aguiar & Jörg Claussen & Christian Peukert, 2018. "Catch Me If You Can: Effectiveness and Consequences of Online Copyright Enforcement," Information Systems Research, INFORMS, vol. 29(3), pages 656-678, September.
    16. Łukasz Tomczyk, 2021. "Evaluation of Digital Piracy by Youths," Future Internet, MDPI, vol. 13(1), pages 1-26, January.
    17. Christophe Bellégo & Romain De Nijs, 2020. "The Unintended Consequences of Antipiracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry," Information Systems Research, INFORMS, vol. 31(4), pages 1064-1086, December.
    18. Huang, Yeu-Shiang & Huang, Wei-Jeh & Fang, Chih-Chiang, 2018. "Coordination for distribution of motion pictures in the context of piracy," Journal of Business Research, Elsevier, vol. 85(C), pages 209-225.
    19. Miguel Godinho de Matos & Pedro Ferreira & Michael D. Smith, 2018. "The Effect of Subscription Video-on-Demand on Piracy: Evidence from a Household-Level Randomized Experiment," Management Science, INFORMS, vol. 64(12), pages 5610-5630, December.
    20. Dan Wu & Guofang Nan & Minqiang Li, 2020. "Optimal Piracy Control: Should a Firm Implement Digital Rights Management?," Information Systems Frontiers, Springer, vol. 22(4), pages 947-960, August.

    More about this item

    Keywords

    switching costs; piracy; competition; digital goods; file-sharing;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibt:wpaper:wp082020. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: IBS (email available below). General contact details of provider: https://edirc.repec.org/data/ibswapl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.