Matthew Hashim

As part of his research, Matthew Hashim developed a laboratory-based game using experimental economics. (Photo by Mark Simons)

Converting Pirates to Payers

Matthew Hashim, PhD ’11, Management Information Systems

For doctoral student Matthew Hashim, digital piracy is a high-tech problem with a potentially low-tech solution.

“The value of unlicensed business software alone is more than $50 billion a year,” he says. “Certain video games are pirated heavily, too, which is what spurred my interest in researching it. My son was interested in a game that had a high piracy rate, and I wanted to know why and what could be done about it.”

Instead of examining such remedies as digital-rights management (DRM) and other forms of technology, Hashim focused on old-fashioned values and consumers’ inherent sense of right and wrong.

“I specifically look at the behavioral aspects of piracy and try to understand the role of information in the decision to purchase or pirate,” he says. “Using a new concept called ‘piracy conversion,’ we take a ‘nudging’ approach that uses targeted information to convert pirates to paying customers.”

“If we can appeal to consumers’ sense of moral self-concept and make them understand the severity of the crime, they can be converted from pirates to paying customers.”
“The goal of my research is to develop management strategies that mitigate piracy and educate consumers that it’s not a victimless crime. It’s not just performing artists, video game creators and software tycoons that lose money to piracy; it’s their employees and related industries that provide distribution, support and service. On a governmental level, piracy also reduces sales tax revenues.”

Unfortunately, the criminal nature of digital piracy makes it an elusive research topic. “Because it’s illegal, piracy is difficult to study and quantify,” Hashim says. “We do know from prior research, however, that hypothetical intention to pirate or purchase translates strongly to actual behavior.”

Other research, while unrelated specifically to piracy, has shown that people will be dishonest to the degree it doesn’t change their individual self-concept, which Hashim describes as the “white lie” effect underlying piracy.

“If we can appeal to consumers’ sense of moral self-concept and make them understand the severity of the crime, they can be converted from pirates to paying customers,” he says. “We’ve shown empirically that a nudging approach works, especially when a company tailors the information to its particular consumers.”

Though many companies take a blanket approach to the problem that focuses on all consumers of their products, Hashim and his research colleagues also developed a laboratory-based game using experimental economics to test the role of information targeting in educating consumers about digital piracy.

“Studying piracy fits well in an experimental environment; data is hard to find and sometimes unreliable because it is biased. People generally don’t want to admit to illegal activity, and companies may not want to reveal their actual piracy rate,” he says. “If we can capture certain aspects of the real world in the laboratory, we can generate useful insights and strategies for managing the problem.”

To learn more about Matthew Hashim, visit his PhD student directory page and read his Q&A profile on the Krannert School’s website.

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