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Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-Strike (Hadopi) Law

39 Pages Posted: 20 Jan 2014 Last revised: 4 Jun 2014

Michael A. Arnold

University of Delaware - Alfred Lerner College of Business and Economics

Eric Darmon

Centre de Recherche en Économie et Management (CREM)

Sylvain Dejean

CEREGE, University of La Rochelle; Centre de Recherche en Économie et Management (CREM)

Thierry Pénard

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

Date Written: May 28, 2014

Abstract

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.

Keywords: Digital Piracy, File sharing, Antipiracy law, Graduated response, Peer effects

JEL Classification: K42, L82, O34

Suggested Citation

Arnold, Michael A. and Darmon, Eric and Dejean, Sylvain and Pénard, Thierry, Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-Strike (Hadopi) Law (May 28, 2014). Available at SSRN: https://ssrn.com/abstract=2380522 or http://dx.doi.org/10.2139/ssrn.2380522

Michael A. Arnold

University of Delaware - Alfred Lerner College of Business and Economics ( email )

Purnell Hall
Newark, DE 19716
United States
(302) 831-1916 (Phone)
(302) 831-6968 (Fax)

Eric Darmon

Centre de Recherche en Économie et Management (CREM) ( email )

7 place Hoche
Rennes, Bretagne 35065
France

Sylvain Dejean

CEREGE, University of La Rochelle ( email )

La Rochelle, F-17042
France

Centre de Recherche en Économie et Management (CREM) ( email )

7 place Hoche
Rennes, Bretagne 35065
France

Thierry Pénard (Contact Author)

Université de Rennes I - Faculte de Sciences Economiques ( email )

7, Place Hoche
35000 Rennes
France

Centre de Recherche en Économie et Management (CREM) ( email )

7 place Hoche
Rennes, Bretagne 35065
France

Armorican Mole for Research on the Information Society and Uses of the Internet ( email )

France

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