Psychology of a Pirate


Cartoon pirate

Have you ever visited a file-sharing website to download something for free to avoid paying for it? You can be honest, we’re all friends here. I am just curious why you did it. Maybe you thought it is not really like stealing. You’ve got a point. Software, music, and other pirated goods are information goods after all. When you download something, it does not increase the marginal costs. You just gained something that you value without it costing anyone a penny. According to economic theory, you just increased your welfare, and thus society’s by the monetary amount you’d value your software for. If a game costs 50 euro, and you value it at 30, you can either not download it, increasing nobodies welfare, or download it and at least increase your own. This piracy stuff is all fair and logical!

To allow people to pay what they consider a fair price companies have started pay-want-you-want pricing models, like the humble bundle for games. This model has been discussed in a blog post by Euclid Alexis Haralambidis, of which I have posted a link in the references. If you can pay what you want, you can actually pay a fair price, and share the welfare gains between you and the producer.

The problem is that it is hard for you as a consumer to determine a “fair” price. Some people might forget that information goods are subject to substantial sunk costs. You pay not only for the marginal costs, but also in part for the development costs. When you can pay what you want, the temptation to understate what the software is worth might be too strong.

How then, can we make sure people pay a fair price for information goods? Harsh punishments don’t help. People who share information goods often believe themselves they are at a lower risk than other populations. (Nandedkar & Midha, 2012) Instead, an appeal to people’s morals might be the answer. Al-Rafee and Rouibah (2009), Chiou et al. (2005). Such an approach would be better if it comes from the developers themselves. It is one thing to avoid paying a nameless corporation, but when your downloading behaviour makes life difficult for the indie developer with which you talked over the forums, or who showed his face in a cool YouTube tutorial, you might think twice about the consequences of your actions.

What do you think the solution to internet piracy is, if there even is one? Did you ever download a game and felt remorse? Do you buy all your information goods, or are you an unrepentant pirate? I’d love to hear from you in the comments.

-Martin Braakhuis

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References:

Al-Rafee, S. & Rouibah, K. (2009). The fight against digital piracy: An experiment. Telematics and Informatics, 27, 283–292.Bandura, A. (1991). Social cognitive theory of moral thought and action.

Chiou, J., Huang, G. & Lee, H. (2005). The antecedents of music piracy attitudes and intentions. Journal of Business Ethics, 57(2), 161–174

Haralambidis, E. A. (2015) Humble Bundle (Pay whatever you want) Information strategy <https://informationstrategyrsm.wordpress.com/?s=humble&gt;

Nandedkar, A. & Midha, V. (2012). It won’t happen to me: optimism bias in music piracy. Computers in Human Behavior, 28(1), 41–48.

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