Interaction effects in software piracy

The paper presents an exploratory attempt to analyse self-reported leniency toward software piracy systematically, using an approach based on empirical factors, rather than ethical factors. The empirical factors studied were: (i) social acceptance of software piracy; (ii) the cost of original software; (iii) urgency of the subject's need for software; (iv) availability of original software; (v) knowledge of computer software copyright law; (vi) gender; (vii) monthly household income; and (viii) education level. It provides new insights to software companies and government officials who are developing programmes to promote the concept of anti-piracy among software consumers. This is also the first exploratory research to study the interaction effects among factors influencing the reported leniency towards software piracy, at the individual level.     

Technology and persistence in global software piracy

This study examines the persistence of software piracy with internet penetration vis-à-vis of PC users, conditional on Intellectual Property Rights (IPRs) institutions. The empirical evidence is based on a panel of 99 countries for the period 1994–2010 and the Generalised Method of Moments. The main finding is that, compared to internet penetration, PC usage is more responsible for the persistence of global software piracy. Knowing how technology affects the persistence of piracy is important because it enables more targeted policy initiatives. We show that the sensitivity of software piracy to IPR mechanisms is contingent on the specific technology channels through which the pirated software is consumed.     

Global software piracy: Trends and strategic considerations

The design, manufacture, distribution, and sale of software constitutes a rapidly growing and remarkably lucrative global industry. Leaders of most software companies understand that intellectual property rights (IPR) typically are vital to competitive advantage and company success. Theft of intellectual property (IP) in the form of software piracy is brazen, extremely costly, lowers incentives to innovate, and threatens the very existence of some companies. IP theft, therefore, is a daunting challenge for managers of software firms. In this article, we make several contributions that should prove helpful to software designers, managers, responsible users, and broad stakeholders of software innovation and use—that is, almost all of us. In doing so, we provide an overview of international legal, ethical, economic, and systemic considerations, and we share an analysis of the drivers of consumer software piracy. We then discuss strategic considerations and introduce a decision-making typology, which may help legitimate companies to devise strategies and tactics to manage their software IP in the face of widespread piracy.     

The morality of software piracy: A cross-cultural analysis

Software piracy is a damaging and important moral issue, which is widely believed to be unchecked in particular areas of the globe. This cross-cultural study examines differences in morality and behavior toward software piracy in Singapore versus the United States, and reviews the cultural histories of Asia versus the United States to explore why these differences occur. The paper is based upon pilot data collected in the U.S. and Singapore, using a tradeoff analysis methodology and analysis. The data reveal some fascinating interactions between the level of ethical transgression and the rewards or consequences which they produce.William R. Swinyard is a Professor of Business Management and holder of the Fred G. Meyer Chair of Retailing at Brigham Young University. Professor Swinyard publishes widely in many top marketing journals, and his work has appeared previously in this journal. Heikki Rinne is an Associate Professor of Business Management at Brigham Young University. He has published in numerous academic journals including the Journal of Marketing Research, the Journal of Retailing, the European Journal of Operational Research, the Journal of Retailing, etc. Ah Keng KAU is an Associate Professor with the Department of Marketing, National University of Singapore, and was previously Director of the School of Postgraduate Management Studies and Head of the Department of Marketing there. Dr. Kau has published papers in many western and international journals.     

Situational determinants of software piracy: An equity theory perspective

Software piracy has become recognized as a major problem for the software industry and for business. One research approach that has provided a theoretical framework for studying software piracy has been to place the illegal copying of software within the domain of ethical decision making assumes that a person must be able to recognize software piracy as a moral issue. A person who fails to recognize a moral issue will fail to employ moral decision making schemata. There is substantial evidence that many individuals do not perceive software piracy to be an ethical problem. This paper applies social exchange theory, in particular equity theory, to predict the influence of situational factors on subjects' intentions to participate in software piracy. Consistent with the predictions of equity theory this study found that input and outcome situational variables significantly effect a person's intentions to commit software piracy.Richard S. Glass is an Assistant Professor of Computer Information Systems at Bryant College in Smithfield RI. His current research interests include the ethical use of information technology, decision making, decision support systems and expert systems.Wallace A. Wood is a Professor of Computer Information Systems at Bryant College in Smithfield RI. His current research interests include the ethical use of information technology and the effective use of information systems.     

An analysis of the predictors of software piracy within Latin America

Corruption has become an increasingly salient issue in recent years due to the increasing pressure placed on top management teams of multinational firms to maintain high moral standards in all facets of their operations. The level and scope of corruption in a particular country is worthy of consideration as companies seek potential export markets and global partners. While macro-level academic research related to causes of corruption has burgeoned in the past decade, there is a lack of depth and breadth with respect to corruption research in Latin America. The current study analyzes patterns of software piracy (a notorious type of corruption) for 20 Latin American nations. Results indicate that economic growth, foreign direct investment, Internet usage, and development assistance relate to software piracy rates in Latin America.     

How many pirates should a software firm tolerate?: An analysis of piracy protection on the diffusion of software

This paper examines the relationship between the rate of software diffusion and piracy. Literature suggests that tolerating some piracy can be justified since it speeds up software diffusion. The question is, how much should be tolerated? Using innovation diffusion models of software adoption by legal buyers and pirates, answers to this question are obtained for the three scenarios of monopoly, multiple generations of software and competitive markets. Results include, for example, that a monopoly should start with minimum protection of its software but well before the product has diffused half way, impose maximum protection and maintain it thereafter. The results provide important strategic guidelines for firms in the software industry for managing piracy.     

Software piracy and outsourcing in two-sided markets

This paper examines the role of software piracy in digital platforms where a platform provider makes a decision of how much software to produce in-house and how much to outsource from a third-party software provider. Using a vertical differentiation model, we theoretically investigate how piracy influences the software outsourcing decision. We find that when piracy is intermediate, the loss in in-house software profits due to piracy outweighs the loss in licensing fee profits. As a result, an increase in piracy leads to more outsourcing. However, when piracy is high, it becomes too expensive for the platform provider to subsidize the software provider, resulting in a decrease in outsourcing. Moreover, when software variety is also endogenously chosen by firms, the platform provider’s incentive to develop software variety in-house depends not only on the return from software profits but also on the return from hardware profits. Under such a situation, an increase in piracy always leads to less outsourcing and less total software variety. To provide additional insights on the outsourcing decision, we conduct empirical analyses using data from the U.S. handheld video game market between 2004 and 2012. This market is a classical two-sided market, dominated by two handheld platforms (Nintendo DS and Sony PlayStation Portable) and is known to have suffered from software piracy significantly. Our regression results show that in this market, piracy increases outsourcing but has no effect on the total software variety.

     

Can entrepreneurial firms benefit from product piracy?

We examine the potential benefits of product piracy to entrepreneurial firms. Specifically, we use a resource-based perspective to show that a decrease in the inimitability of an entrepreneurial firm's intellectual property does not necessarily diminish performance when piracy increases the value of this resource, and an information economics perspective to explain why and when imitation can increase the value of an intellectual property resource. This explanation reconciles empirical studies that indicate mixed results. It also expands the resource-based view by suggesting that reducing the value of one resource can directly increase the value of another.     

On the monetary impact of fashion design piracy

Whether to legally protect original fashion designs against piracy is an ongoing debate among legislators, industry groups, and legal academic circles, which has gained little exposure in the marketing literature. We combine data on the growth of fashion designs, price markups, and industry statistics to develop a formal analysis of the essential questions at the base of the debate. We distinguish between three effects: Acceleration, whereby the presence of a pirated design increases the awareness of the design; Substitution, which represents the loss of sales due to consumers who would have purchased the original design, yet instead buy the knockoff; and loss because of Overexposure of the design resulting from the design's ubiquity. Using data-driven simulation analysis, we find that for the items analyzed (handbags and apparel), overexposure emerged as having a stronger negative effect (on average) on the original's profitability than the positive effect of acceleration. Both effects are considerably larger than that of substitution. This result is of particular interest given that industry groups have consistently focused on the damage caused by substitution. We also show that the effect of a legally mandated postponement on the introduction of a knockoff is non-monotonic for short lag: A short time lag may not affect the original design's NPV, and in fact may even damage it. For the ranges we analyzed, the positive effect of the protection period is observed primarily for time lags of over one year.     

Online piracy in the context of routine activities and subjective norms

Why do mainstream consumers who would not typically engage in illegal behaviour routinely resort to online piracy of copyrighted software? This paper provides answers to this research query by applying routine activity theory and the theory of reasoned action. The paper’s study analyses consumers’ role as possible offenders that can have the opportunity to engage in online software piracy as part of their routine online activities. Although it is problematic to measure the exact magnitude of the negative impact on the US economy, as stated by the Government Accountability Office it is sizeable. After analysing the conceptual model using a US national consumer sample of over 700 consumers, results show the influence of proximity to motivated offenders, target suitability, and capable guardianship on consumers’ attitudes and perceived subjective norms towards online software piracy, as well as their intentions to engage in this illegal behaviour on the Internet. By integrating routine activity theory, a criminology theory with the theory of reasoned action from psychology and analysing a widespread online software piracy phenomenon, several academic and practical contributions are made.     

The role of religious leaders on digital piracy attitude and intention

This study examines the role of religious leaders and individual's religiousness in affecting attitude towards digital piracy and behavior intention. The data analysis of 400 usable responses from a religious organisations provided several significant relationships. Attitude towards digital piracy and subjective norms has a negative relationship with digital piracy intention. There are also significant differences between highly religious and less religious respondents in terms of their attitude towards digital piracy, motivation to comply with their religious leaders, and intention to engage in digital piracy behavior.     

The ideology of social justice in economic justice for all

Although both the American Catholic bishops and their commentators seem to agree that the economics pastoral is capitalist, if anything, in its ideology, a careful reading of the pastoral shows that the principle of social justice implicit in it is actually socialist, indeed communist, in nature. The bishops arrived at such a principle because of their interpretation of the biblical sense of justice as entailing a preferential option for the poor. To justify this option on a rational basis, they developed a theory of social justice that may be summarized in the principle, familiar from Marx's writings, From each according to one's ability, to each according to one's needs. Whether or not the bishops intended such a convergence in principle, this development sets them at odds with the capitalist ideology of the United States. William E. Murnion, S.T.L. (Gregorian University, 1958), Ph.D. in Philosophy (Gregorian University, 1970), is Associate Professor of Philosophy and Religious Studies at Ramapo College of New Jersey, where he teaches an ethics course for the business school. Recent publications include The Logic of Learning, Foundations of Ethics, and Nuclear Violence: A Philosophical Framework for the Problem.     

How ethical and political identifications drive adaptive behavior in the digital piracy context

Today, digital piracy remains a growing challenge for both legislators and businesses operating in the entertainment industry. This study explores when and why consumers make trade-offs between illegal and legal streaming services. By drawing on protection motivation theory, we find that consumers' threat and coping appraisals increase their adaptive behavior, i.e., lower intention to consume illegal and higher intention to consume legal streaming services. We also show that the strength of consumers' inherent ethical (relativism) and political (economic liberalism) identities conditions adaptive behavior through social identity theory. We find that low relativism strengthens the adaptive behavior through threat appraisal, while economic liberalism strengthens the adaptive behavior through coping appraisal. Our robustness checks show that these results hold when the model accounts for the level of consumers' digital piracy attitudes. We used a scenario-based approach to test our hypotheses and surveyed 244 consumers who use streaming services. Our study contributes to the literature by showing that consumers' adaptive behavior envisioned through protection motivation theory can be weakened or strengthened by their ethical and political identities.     

Pricing and coordination with consideration of piracy for digital goods in supply chains

Sales of digital goods via traditional channels are affected by those on digital channels, and thus a competitive relationship often exists. In addition, due to the ease of piracy, digital goods may suffer from a fall in demand, which intensifies competition. This study considers a single supplier who sells digital goods, which may be pirated, to customers through two independent and different retail channels, such as traditional and digital ones, which may compete with each other in terms of service and price. To consider the effects of piracy on demand, a Stackelberg game is utilized to determine the optimal gain-sharing ratio and the equilibrium prices for all channel members with an aim to maximize the profit of the entire supply chain. It is found that an increase in piracy would force retailers to compete in a smaller market, and thus lead to a decrease in profits for each channel member. Therefore, a retailer who has a greater market share and is capable of managing a lower piracy rate would gain more profits by setting a higher price.     

Review essay: Deregulation and distributive justice

This article is an extended critical review of a set of essays arguing for the deregulation of U.S. industry. The essays are by mostly lawyers and economists, not philosophers. The writers act as though non-market-based theories of distributive justice do not exist. Nonetheless, the essays are ingenious and sophisticated enough to present a considerable challenge to such theories. In criticism I discuss chiefly two broad themes — the considerations a non-market-based theory would adduce in rebuttal, and the use by the writers of the existing legal framework. The book illustrates most forcefully the clash between rival philosophical visions of the Good Society. Roger A. Shiner is Professor of Philosophy at the University of Alberta. His most important publications are: Knowledge and Reality in Plato's Philebus (Assen, 1974); articles on legal theory in M. A. Stewart (ed.), Law, Morality and Rights (Dordrecht, 1983); Philosophia, University of Toronto Law Journal, Wm & Mary Law Review; on Wittgenstein in Proc. of the Aristotelian Society, Philosophy and Dialogue; on aesthetics in Journal of Aesthetics and Art Criticism, British Journal of Aesthetics, Philosophy and Dialogue.     

Power and control in the franchise network: an investigation of ex-franchisees and brand piracy

This research considers the issue of franchisees who exit the franchise system in order to continue operating independently. The literature regarding incentives for entering franchising is reviewed in an attempt to reveal why franchisees become dissatisfied and leave. The use of power by the franchisor and its relationship to brand piracy by franchisees is explored. Franchisors and their current and former franchisees are interviewed to uncover insights into this phenomenon. Explanations concerning the effectiveness of contractual remedies, dissatisfaction with the franchise, level of dependence and expectations in the relationship, and franchisor-franchisee goal incongruence are proposed.