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  • Summer 2017
  • Article
  • Journal of Economics & Management Strategy

Copyright Enforcement: Evidence from Two Field Experiments

By: Hong Luo and Julie Holland Mortimer
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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 generate 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.

Keywords

Copyright; Law Enforcement; Lawsuits And Litigation; Cost

Citation

Luo, Hong, and Julie Holland Mortimer. "Copyright Enforcement: Evidence from Two Field Experiments." Journal of Economics & Management Strategy 26, no. 2 (Summer 2017): 499–528.
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About The Author

Hong Luo

Strategy
→More Publications

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More from the Authors
  • Spotify's Audio-First Strategy: Leading the Podcasting Market By: Hong Luo and Carol Lin
  • Universal During COVID: The Future of Theatrical Windows By: Hong Luo, Henry McGee and Carol Lin
  • Invest in Information or Wing It? A Model of Dynamic Pricing with Seller Learning By: Guofang Huang, Hong Luo and Jing Xia
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