Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-Strike (Hadopi) Law
Michael A. Arnold
University of Delaware - Alfred Lerner College of Business and Economics
Centre de Recherche en Économie et Management (CREM)
LR-MOS, University of La Rochelle; Centre de Recherche en Économie et Management (CREM)
Université de Rennes I - Faculte de Sciences Economiques; Centre de Recherche en Économie et Management (CREM); Armorican Mole for Research on the Information Society and Uses of the Internet
May 28, 2014
Most developed countries have tried to restrain digital piracy by strengthening laws against copyright infringement. In 2009, France implemented the Hadopi law. Under this law individuals receive a warning the first two times they are detected illegally sharing content through peer to peer (P2P) networks. Legal action is only taken when a third violation is detected. We analyze the impact of this law on individual behavior. Our theoretical model of illegal behavior under a graduated response law predicts that the perceived probability of detection has no impact on the decision to initially engage in digital piracy, but may reduce the intensity of illegal file sharing by those who do pirate. We test the theory using survey data from French Internet users. Our econometric results indicate that the law has no substantial deterrent effect. In addition, we find evidence that individuals who are better informed about the law and piracy alternatives substitute away from monitored P2P networks and illegally access content through unmonitored channels.
Number of Pages in PDF File: 39
Keywords: Digital Piracy, File sharing, Antipiracy law, Graduated response, Peer effects
JEL Classification: K42, L82, O34
Date posted: January 20, 2014 ; Last revised: June 4, 2014
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