Copyright Enforcement: Evidence from Two Field Experiments

44 Pages Posted: 14 Mar 2016 Last revised: 15 Apr 2016

See all articles by Hong Luo

Hong Luo

Harvard Business School - Strategy Unit

Julie H. Mortimer

Boston College; National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: March 2016

Abstract

Effective dispute resolution is important for reducing private and social costs. We study how resolution responds to changes in price and communication using a new, extensive dataset of copyright infringement incidences by firms. The data cover two field experiments run by a large stock-photography agency. We find that substantially reducing the requested amount generates a small increase in the settlement rate. However, for the same reduced request, a message informing infringers of the price reduction and acknowledging the possible unintentionality generates a large increase in the settlement rate; including a deadline further increases the response. The small price effect, compared to the large message effect, can be explained by two countervailing effects of a lower price: an inducement to settle early, but a lower threat of escalation. Furthermore, acknowledging possible unintentionality may encourage settlement due to the typically inadvertent nature of these incidences. The resulting higher settlement rate prevents additional legal action and significantly reduces social costs.

Suggested Citation

Luo, Hong and Mortimer, Julie H., Copyright Enforcement: Evidence from Two Field Experiments (March 2016). NBER Working Paper No. w22082. Available at SSRN: https://ssrn.com/abstract=2747202

Hong Luo (Contact Author)

Harvard Business School - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States

Julie H. Mortimer

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-3676 (Phone)

HOME PAGE: http://fmwww.bc.edu/ec/mortimer.php

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

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