Abstract
We study a relationship between perceived price fairness and digital piracy. In a large-scale field experiment on customers of a leading ebook store, we employ the Bayesian truth serum to elicit the information on acquiring books from unauthorized sources (often referred to as digital piracy). We provide empirical evidence in support of the conjecture that willingness to “pirate” is associated with having experienced subjective overpricing. We propose and verify the relevance of two mechanisms behind this link: reactance theory and moral cleansing/licensing. The results indicate that pricing policy perceived as fair may reduce the scope for digital piracy.
Highlights
The price of cultural goods has often been raised in public debate as one of the reasons why individuals resort to illicit downloading instead of legitimate purchases, see for example a report by AACU.2 Lysonski and Durvasula (2008) went as far as to claim that the so-called Generation Y is permissive of piracy because they consider themselves victims of music prices being artificially inflated by the industry
We study a relationship between perceived price fairness and digital piracy
We find negative and significant coefficients for price unfairness: higher gap between the fair price and recent price experience is associated with higher prevalence of digital piracy
Summary
The price of cultural goods has often been raised in public debate as one of the reasons why individuals resort to illicit downloading instead of legitimate purchases (often referred to as digital piracy1), see for example a report by AACU.2 Lysonski and Durvasula (2008) went as far as to claim that the so-called Generation Y is permissive of piracy because they consider themselves victims of music prices being artificially inflated by the industry. To the best of our knowledge, the very notion of “high price” is not academically defined and this relationship has not been verified in the earlier literature, see, e.g., meta-analyses by Liebowitz (2016) and Hardy et al (2018). A “high price” need not be viewed as an unfair or unjust price. It appears that the literature has analyzed thoroughly the link between price and willingness to buy a cultural good (see, e.g., Hinduja 2003; Kwong et al 2003; Al-Rafee and Cronan 2006; Higgins et al 2008) with less attention devoted to the choices of alternative methods of acquisition. This paper reports results from a field experiment on the relationship between the experience of unfair pricing in the case of cultural goods and acquiring cultural goods from unauthorized sources
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