Illegal Online Filesharing : Economic Psychology Issues

This article develops and introduces hypothesis of economic psychology factors that directly or indirectly cause illegal online filesharing; and in doing so, fills critical gaps in the existing literature. Illegal downloads of digital content and music worldwide has resulted in substantial losses in many industries, and particularly in the entertainment and education industries. The issue involves various policy, legal, technological and economic problems that have not yet been resolved even as Internet use continues to grow substantially, and IP rights enforcements efforts are publicized. Its has become apparent the illegal online filesharing involves substantial psychological issues that implicate elements of cognition, perceptions of fairness, value of time, risk aversion and many other behavioral issues. The lack of efficient methods of controlling downloads of digital content is compounded by sub-optimal pricing of digital content. Some of the hypothesis introduced in this article cannot be tested using traditional rigorous statistical methods such as regressions because: a) data don't fit most known distributions, b) data is likely to vary (low to moderate variations) by age group, profession, household income, family background, geographical location, and other factors, such that it will be unreasonable to make generalizations from regressions and some correlations (hence, surveys and analysis of Internet-usage data maybe the most accurate empirical methods)