Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment Hong Luo Julie Holland Mortimer NBER Working Paper No. 25453

Issued in January 2019

NBER Program(s):Industrial Organization, Productivity, Innovation, and Entrepreneurship

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.

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randomized controlled trials registry entry Acknowledgments Machine-readable bibliographic record - MARC, RIS, BibTeX Document Object Identifier (DOI): 10.3386/w25453