Matthew J. Hashim

Digital Piracy, Teens, and the Source of Advice: An Experimental Study

The objective of our paper is to determine the effect of piracy advice from various sources on the behavior of the music consumer. Specifically, does it matter if the source of advice has a stake in the outcome of the piracy decision? Does it matter if the source of advice has a social tie with the advisee? Accordingly, we conduct a laboratory experiment using teenagers and their parents as subjects, increasing the realism of the context by sampling potential pirates and their parents. Treatments represent various sources of piracy advice (e.g., the teens parent, a record label, or an external regulator). Subjects make decisions playing our new experimental game—The Piracy Game—extended from the volunteers dilemma literature. Interestingly, subjects respond negatively to advice from record labels over time, purchasing fewer songs as compared to other sources such as the subjects parent. The existence of a social tie between the adviser and the subject assists in mitigating piracy, especially when a parent is facing potential penalties due to his or her childs behavior. An external regulator, having no social tie or stake in the decision, provides the least credible source of advice, leading to the greatest amount of piracy. Our analyses not only provide managerial insights but also develop theoretical understanding of the role of social ties in the context of advice.

Information Feedback, Targeting, and Coordination: An Experimental Study

There are many contexts in which an “everybody else is doing it” attitude is relevant. We evaluate the impact of this attitude in a multithreshold public goods game. We use a lab experiment to study the role of providing information about contribution behavior to targeted subsets of individuals, and its effect on coordination. Treatments include one in which no information is provided and three other treatments, i.e., where information is provided to a random sample of subjects; to those whose contributions are below the average of their group, and to those whose contributions are above the average of their group. We find that the random provision of information is no different than not providing information. More important, average contributions improve with targeted treatments. Coordination waste is also lower with targeted treatments. The insights from this research are more broadly relevant in the contexts of piracy, open innovation, and crowdfunding. The online appendix is available at https://doi.or...

Central Role of Moral Obligations in Determining Intentions to Engage in Digital Piracy

Abstract Piracy is a significant source of concern facing software developers, music labels, and movie production companies, to name a few. Digital goods producers and government entities argue that there are victims of piracy, whereas pirates may perceive their actions to be victimless. Regarding implications of our research, we extend the theory of planned behavior (TPB) by theorizing that attitudes, subjective norms, and perceived behavioral control could influence perceptions of moral obligations as a consequence of the desire to rationalize unethical behavior. Unlike prior literature, we manipulate the rationalization of moral obligations due to the victimless view toward piracy and show how moral obligations become important determinants of piracy behavior. Accordingly, our demonstrated malleability of morals may be an important path through which individuals are able to continue past behaviors. We also conduct a second study to identify the effect of implementing an educational message from a fictitious software company to exogenously nudge the pirate and influence the impact of perceived moral obligations on intentions to pirate. Our results show that the introduction of an exogenous educational message is an effective piracy mitigation strategy.

Relative Privacy Valuations Under Varying Disclosure Characteristics

Our study investigates relative changes to the value individuals place on the disclosure of their private information. We use an incentive compatible mechanism to capture an individual’s willingness-to-accept (WTA) for a privacy disclosure in three randomized experiments. Characteristics of the required privacy disclosures are manipulated by altering information context, intended secondary use of the disclosed private information, and the requirement to disclose personally identifying information. We consistently find across the experiments that the information context influences the relative value of a disclosure but we observe null effects for external secondary use and the inclusion of identifying information. We increase the saliency of the privacy disclosure characteristics in the second experiment, which is found to increase participants’ average WTA but does not change relative values across the varying disclosure characteristics. In the third experiment, we train participants on the potential consequences of disclosing private information, which does not increase participants WTA beyond simply increasing the saliency of the privacy factors in a disclosure. Training participants of the consequences also does not influence the relative value of privacy disclosures across the varying disclosure characteristics. However, through a post-experiment survey we find that participants do acknowledge the increased risk introduced through external secondary use and providing identifying information. Additionally, we find that the participants’ internet privacy concerns increase when they are trained on the consequences of disclosing private information online. These results provide a unique perspective on privacy valuations. They fill a gap in the literature by clarifying privacy factors that influence the value of a multidimensional disclosure and provide further evidence of the privacy paradox, where consumers claim a desire for privacy but their economic actions suggest otherwise.

Delivery of Movies via the Internet: Uncovering the Effects of the Availability of Digital Formats on Physical Sales

The impact of multi-channel technology-enabled digital goods on the sales of the physical counterpart faces uncertainty in the electronic commerce domain. We address the issue empirically by identifying the effect of the availability of digitally-delivered movies on physical DVD movie sales. Unique to our study is our interest in not only purchased digital goods but rented digital goods as well. We construct a robust panel dataset consisting of movie data collected from Amazon and Barnes and Noble on the same day for every movie observed. A key feature of our dataset is the multi-channel availability of digital purchase and digital rental movie formats at Amazon. Our results show that the availability of the digital purchase format does not have a significant effect on DVD sales. Surprisingly, the availability of the digital rental format is associated with a significant reduction in DVD sales. The results imply that a product substitution effect may be occurring between the digital rental and the physical DVD purchase of the same movie. We also conduct robustness tests to show under which conditions the effect is greatest. Our results also provide practical implications to inform strategies regarding movie format release windows.

Overcoming Free-Riding in Information Goods: Sanctions or Rewards?

Economic environments involving information goods often suffer from an extensive free-riding problem. For example, social loafing and lurking on content and discussion forums, leeching on file-sharing networks, and pirating of digital goods. Despite the use of interventions, it is not clear what types of interventions result in the best outcomes for all players involved. We conduct a lab experiment using a public goods game to explore the role of rewards and sanctions at both the individual and group levels on mitigating free-riding behavior. The results of the experiment provide interesting insights on the behavior of free-riding and the use of negative and positive incentives to improve total welfare. Interestingly, sanctioning and rewarding individuals has non-obvious consequences. Sanctioning only the worst free-rider in the group results in a significant decrease in free-riding for the worst free-rider and marginal decreases in free-riding for all other group members. Rewarding only the highest contributor in the group results in a significant increase in free-riding for that individual and everyone else in the group. Overall, our research offers significant insights for the design and implementation of interventions and incentive schemes in information goods environments having the free-rider problem.