Online Piracy and the 'Longer Arm' of Enforcement

Management Science, Vol. 65, No. 3, pp. 1173–1190 (2019)

Posted: 21 Jul 2013 Last revised: 6 Sep 2019

See all articles by Debabrata Dey

Debabrata Dey

University of Washington

Antino Kim

Indiana University - Kelley School of Business - Department of Operation & Decision Technologies

Atanu Lahiri

University of Texas Dallas

Date Written: October 11, 2017

Abstract

Controlling digital piracy has remained a top priority for manufacturers of information goods, as well as for many governments around the world. Among the many forms taken by digital piracy, we focus on an increasingly common one -- namely, online piracy -- that is facilitated by torrent sites and cyberlockers who bring together consumers of pirated content and its suppliers. Motivated by recent empirical literature which makes a clear distinction between anti-piracy efforts that restrict supply of pirated goods (supply-side enforcement) and ones that penalize illegal consumption (demand-side enforcement), we develop a simple economic model and discover some fundamental differences between these two types in terms of their impacts on innovation and welfare. All in all, supply-side enforcement turns out to be the "longer arm" -- it has a more desirable economic impact in the long run. Our results have clear implications for manufacturers, consumers, and policymakers.

Keywords: Online piracy, supply-side enforcement, demand-side enforcement, innovation, welfare

Suggested Citation

Dey, Debabrata and Kim, Antino and Lahiri, Atanu, Online Piracy and the 'Longer Arm' of Enforcement (October 11, 2017). Management Science, Vol. 65, No. 3, pp. 1173–1190 (2019). Available at SSRN: https://ssrn.com/abstract=2296116 or http://dx.doi.org/10.2139/ssrn.2296116

Debabrata Dey (Contact Author)

University of Washington ( email )

Foster School of Business
511 PACCAR Hall
Seattle, WA 98195-3226
United States
206-543-1855 (Phone)

HOME PAGE: http://faculty.washington.edu/ddey/

Antino Kim

Indiana University - Kelley School of Business - Department of Operation & Decision Technologies ( email )

Business 670
1309 E. Tenth Street
Bloomington, IN 47401
United States
812.855.2905 (Phone)

Atanu Lahiri

University of Texas Dallas ( email )

University of Texas at Dallas
Richardson, TX 75080
United States

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