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Most people don’t feel guilty copying a $1,000 software application from Microsoft, but they would never steal a $10 mouse from the same company, according to a study by Chris Hsee, Theodore O. Yntema Professor of Behavioral Science and Marketing, and fellow researchers Joseph Nunes of University of Southern California and Elke Weber of Columbia University. “Consumers don’t feel Microsoft loses anything if they copy its software,” Hsee said. “But if they steal a mouse from Microsoft, Microsoft actually loses the mouse.”
Psychologists call that thought process the distinction between a foregone gain and a loss, Hsee said. “If you have a dollar on a table that is yours but you don’t take it, then you forego a gain. If you have a dollar in your pocket and you lose it, then it’s a dollar lost. From an economic perspective, both acts constitute losses. But from a psychological perspective, they feel very different,” Hsee said.
Companies can devise strategies to make their intellectual products less prone to piracy, Hsee said. For example, they can increase the perceived ratio between the variable and fixed cost of a product and thereby increase the perceived ratio between loss and foregone gain if a consumer steals the product, he said. “To have an understanding in the 21st century of the consumer psychology of intellectual products is important not only for the consumer’s perspective, but also for the developer of those intellectual properties,” Hsee said.
Read a copy of “Why are People So Prone to Steal Software? The Effect of Cost Structure on Consumer Purchase and Payment Intentions.”
—Phil Rockrohr
Professor Hsee has also done research into the relationship between income and happiness. You can read about a recent survey he conducted of citizens in several Chinese cities.