The Determinants of Music Piracy in a Sample of College Students

Bellemare, Marc F. and Holmberg, Andrew M. (2010): The Determinants of Music Piracy in a Sample of College Students.

Abstract

Why do some individuals pirate digital music while others pay for it? Using data on a sample of undergraduate students, we study the determinants of music piracy by looking at whether a respondent’s last song was obtained illegally or not. In doing so, we incorporate (i) the individual-specific transactions costs that constitute the effective price of illegal music; and (ii) individual willingness to pay (WTP) for digital music, which we elicit using a simple field experiment and which we use to control for the unobserved heterogeneity of preferences between respondents. Our empirical results indicate that a respondent’s subjective probability of facing a lawsuit and her degree of morality both have a negative impact on the likelihood that her last song was obtained illegally. These results are robust whether WTP is estimated parametrically or nonparametrically. We conclude by discussing the practical implications of our findings.

• Item Type: MPRA Paper
• Language: English
• Keywords: Music Piracy, Transactions Costs, Subjective Expectations
• Subjects: D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights; D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; K - Law and Economics > K1 - Basic Areas of Law > K11 - Property Law; L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services ; Computer Software

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