THE EFFECT OF PREVENTIVE AND DETERRENT SOFTWARE PIRACY STRATEGIES ON PRODUCER PROFITS

In an attempt to protect their intellectual property and compete effectively in an increasingly dynamic marketplace, software producers have employed a number of preventive and deterrent measures to counter software piracy. Conventional wisdom suggests that reducing piracy will force consumers to legitimately acquire software, thus increasing firm profits. In this paper, we develop an analytical model, using Buchanan\u27s economic theory of clubs, to test the implications of anti-piracy measures on producer profits. Our results suggest that deterrent measures can potentially increase profits. Empirical results are also presented which support the assumptions of the analytical model

Limitation of Sales Warranties as an Alternative to Intellectual Property Rights: An Empirical Analysis of IPhone Warranties’ Deterrent Impact on Consumers

Apple\u27s success with the Apple iPhone has brought with it certain problems. Its success has engendered a community that has attempted to circumvent Apple\u27s exclusive service agreement with AT&T. Unfortunately for Apple (and similarly situated manufacturers), intellectual property law allows consumers to alter their products so as to circumvent relationships that manufacturers may have with others. The patent and copyright law first sale doctrine allows consumers to manipulate a product after it is purchased. As a result, manufacturers are increasingly turning to alternatives to intellectual property to secure control over the device after the sale. One such alternative is the exclusion of warranty under Article 2 of the Uniform Commercial Code. This iBrief considers whether limitation of warranties have the deterrence effect manufacturers desire. Said differently, it considers whether manufacturers can use warranty limitations to prevent consumers from using their products in an unauthorized manner. The iBrief presents a behavioral model based on the Triandis model of planned behavior and enhances the model by accounting for likely and unlikely benefits and detriments. The model suggests that participants weigh the probability and magnitude of the detriment against the probability and magnitude of the beneficial impact when making the decision to engage in technological piracy. This model, considered with other empirical evidence, suggests that Apple\u27s warranty could be a stronger deterrent for consumers than civil liability. The iBrief concludes that manufacturers can better protect their post-sale expectation of profits by raising consumer awareness of their warranty\u27s quality and by raising awareness of the consequences for using the product in a way that is outside the terms of the consumers\u27 authorized use

The Computer Generation's Willingness to Pay for Originals when Pirates are Present – A CV study

A contingent valuation method is applied to study subjects' willingness to pay for originals when illegal copies are freely available. The subjects consisted of 234 Swedish undergraduate students from the "computer generation". Only 2% of the "normal" (and 0% of the "elite") students were willing to pay the retail price for the original. However, the majority was prepared to pay a non-negligible amount for the original. Demand curves and profit maximizing behaviors are analyzed. The price elasticity of piracy indicates that piracy is insensitive to price cuts. The results have implications for the calculation of damages of piracy.Piracy; Contingent Valuation; Damages; Software

White Knight or Trojan Horse? The Consequences of Digital Rights Management for Consumers, Firms and Society

Due to its ability to solve all main problems associated with digital goods, Digital Rights Management is the favourite option used by companies to tackle piracy. The aim of this article is to discuss the consequences of DRM for consumers, firms and society. The rationales of DRM are discussed and the expected benefits for firms are presented.. In contrast, consumers are shown to be likely to see few benefits in DRM. This article demonstrates that even a standard DRM system is unlikely to improve social welfare. The article concludes with some public policy recommendations.Digital Rights Management, Digital Goods, Piracy, Excludability, Durability, Sampling.

Developing a Predictive Model of Software Piracy Behavior: An Empirical Study

There is, perhaps, no more visible financial dilemma in the software industry today than that of software piracy. In this paper, we detail the development and empirical validation of a predictive model of software piracy behavior by computer-using professionals. The model was developed from the results of prior research in software piracy and the reference disciplines of the theory of planned behavior, expected utility theory and deterrence theory. The study utilized two methods to analyze the piracy decision. A survey was used to test the entire model and an experiment was undertaken to test several relationships between the included variables. The results indicate that the identified factors have a significant impact on the decision to pirate software and that the model is a useful tool in further understanding this behavior. The results add to a growing stream of MIS research into piracy behavior and have significant implications for organizations and industry groups aiming to reduce piracy behavior

Product piracy : the problem that will not go away

The phenomenon of product piracy, when examined against different cultural, social and developmental needs, may result in a moderation of traditional moral judgments that have tended to deprecate piracy at every conceivable opportunity. Outlines the magnitude of product piracy, notably in the Asian region, presents a delineation of the relevant terminology, discusses strategies used in preventing product piracy and examines alternative views on the ethics of the practice. <br /

Internet Exchanges for Used Books: Welfare Implications and Policy Issues

The emergence of simultaneous online markets for used and new books has caused concern among industry groups such as the Author’s Guild and the Book Publishers Association. These groups note that authors do not earn royalty payments from used book sales and as a result Internet markets for new and used goods may undermine the creative incentives for authors. This proposition, while theoretically possible, remains untested and many potentially countervailing effects remain unexplored. For example, the availability of a resale market may or may not cannibalize the new good market. In other words, the elasticity of demand between new and used goods may be such that it may or may not adversely affect the new book prices and sale. In such scenario, the total book market may expand, leading to higher customer surplus without hurting the authors’ royalties. Ultimately, the actual impact of Internet used book sales on author and publisher welfare is an empirical question. In this research, we use economic theory and structural estimation to model the welfare implications of Internet used book exchanges for consumers, retailers, publishers, and authors. We calibrate our models using a unique dataset collected from Amazon.com’s new and used marketplaces. Our data collection and analysis are ongoing. We will be able to present full results at the conference

Profiling movie downloaders in Egypt: Law awareness as an attitudinal factor

This study is aimed at determining the main antecedents of the intention to illegally download movies in Egypt. This study examined the role of law awareness in forming the attitude toward illegal downloading and the methods downloaders use to rationalize their act. A model was proposed based on the planned behavior, neutralization and deterrence theories. A sample of 384 Mass Communication students at Cairo University was surveyed. The findings showed that law awareness does not play a direct role in forming attitudes toward movie illegal downloading. Even though the more illegal downloaders were aware of the illegality of movie copyright infringement, the more they perceived the law as deterrent; they continued downloading movies. The results also indicated that perceived deterrence has no direct correlation with attitude. The results showed that downloaders with lower levels of law awareness needed to rationalize their piracy act, which may indicate that they are aware of the immorality of their act regardless of its illegality. In addition, limiting access to movies and failing to provide more legitimate venues may cause more favorable attitude toward the illegal downloading which may represent one of the very few choices left to movie fans. Furthermore, attitude was found to be the strongest determinant of illegal downloading intention. Moreover, the current findings showed that movie downloaders perceived movie piracy as an easy act. The fight against piracy should include non-downloaders also, since this study showed that the societal acceptance was another driving force for movie piracy