Intrinsic adherence to law: physical versus intellectual property

Abstract

Infringement of intellectual property seems to be much more common than infringement of physical property. Intellectual property rights protect goods that are non-rival in consumption, while physical property rights protect rival goods. Nonrivalry implies that the owner suffers no direct harm from infringement. This could explain lower respect for property rights in nonrival goods. To test this hypothesis, we isolate the dimension of rivalry in an experiment. We develop a theft game that offers plausible deniability and minimizes experimenter demand. We find no evidence, either in behavior or in social norms, that participants’ respect for nonrival goods is lower than for rival goods. This suggests that the widespread infringement of intellectual property rights is not due to their nonrival nature. We examine this result in a vignette study and find that stealing a nonrival good is more socially acceptable when the user’s valuation is below the price of the good.