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Software piracy remains rampant despite the successful measures the Hong Kong government has taken to eradicate street piracy. This is because most people prefer substituting a counterfeit copy of a software CD street piracy with an illegal download of the software Internet piracy. To support this claim, I construct a unique data set from 281 college students in Hong Kong to demonstrate two things. First, I estimate a random-coefficient discrete choice demand system for Microsoft Office from legal and different illegal sources. Estimates obtained from a Bayesian approach, with a mixture of normal priors,indicate a strong substitution pattern between street piracy and Internet piracy. Second, I conduct counterfactuals in which street piracy is absent. Results are twofold. First, most students would switch to Internet piracy. Second, the government, by assuming that each pirated copy represents a lost sale, may over-estimate the gain from eradicating piracy by up to nine times.

Item Type: MPRA Paper -

Original Title: What is the True Loss Due to Piracy?: Evidence from Microsoft Office in Hong Kong-

Language: English-

Keywords: software piracy, bayesian, conjoint analysis-

Subjects: K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of LawL - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services ; Computer Software-

Autor: Leung, Tin Cheuk

Fuente: https://mpra.ub.uni-muenchen.de/32597/

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