Pirates in the Lab: Using Incentivized Choice Experiments to Explore Preference for (Un)Authorized Content1

In this paper, we report on a laboratory experiment aimed at investigating factors affecting choice between different versions of a full-length movie. In particular, we are able to pin down the willingness to pay for a legal, rather than pirated, copy and compare it to the impact of such characteristics as picture quality or delay in delivery. We find a modest but highly significant preference for the authorized version. We also find that when the proceeds from legal sales are transferred to a good cause, willingness to pay for the unauthorized copy is reduced. Our method does not seem to suffer from hypothetical bias.