Leung, Tin Cheuk (2011): What is the True Loss Due to Piracy?: Evidence from Microsoft Office in Hong Kong.
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Software piracy remains rampant despite the successful measures the Hong Kong government has taken to eradicate street piracy. This is because most people prefer substituting a counterfeit copy of a software CD (street piracy) with an illegal download of the software (Internet piracy). To support this claim, I construct a unique data set from 281 college students in Hong Kong to demonstrate two things. First, I estimate a random-coefficient discrete choice demand system for Microsoft Office from legal and different illegal sources. Estimates obtained from a Bayesian approach, with a mixture of normal priors, indicate a strong substitution pattern between street piracy and Internet piracy. Second, I conduct counterfactuals in which street piracy is absent. Results are twofold. First, most students would switch to Internet piracy. Second, the government, by assuming that each pirated copy represents a lost sale, may over-estimate the gain from eradicating piracy by up to nine times.
|Item Type:||MPRA Paper|
|Original Title:||What is the True Loss Due to Piracy?: Evidence from Microsoft Office in Hong Kong|
|Keywords:||software piracy, bayesian, conjoint analysis|
|Subjects:||K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services; Computer Software
|Depositing User:||Unnamed user with email email@example.com|
|Date Deposited:||07. Aug 2011 06:32|
|Last Modified:||14. Feb 2013 05:59|
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