The Nature and Incidence of Software Piracy: Evidence from Windows

Susan Athey, Scott Stern

Chapter in NBER book Economic Analysis of the Digital Economy (2015), Avi Goldfarb, Shane Greenstein, and Catherine Tucker, editors (p. 443 - 477)
Conference held June 6-7, 2013
Published in April 2015 by University of Chicago Press
© 2015 by the National Bureau of Economic Research

This chapter evaluates the nature, relative incidence, and drivers of software piracy. The authors measure piracy for a specific product - Windows 7 - which was associated with a significant level of private sector investment. Using anonymized telemetry data, the authors characterize how piracy occurs, the relative incidence of piracy across different economic and institutional environments, and the impact of enforcement efforts on choices to install pirated versus paid software. The authors find that: (a) most "retail piracy" can be attributed to a small number of widely distributed "hacks" available through the Internet, (b) the incidence of piracy varies significantly with the microeconomic and institutional environment, and (c) software piracy primarily focuses on the most "advanced" version of Windows (Windows Ultimate). After controlling for a small number of measures of institutional quality and broadband infrastructure, one important candidate driver of piracy - GDP per capita - has no significant impact on the observed piracy rate, while the innovation orientation of an economy is associated with a lower rate of piracy. Finally, the authors evaluate how piracy changes in response to country-specific anti-piracy enforcement efforts against specific peer-to-peer websites; overall, they find no evidence that such efforts have affected the incidence of software piracy.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from

This paper was revised on June 19, 2015

Machine-readable bibliographic record - MARC, RIS, BibTeX

This chapter first appeared as NBER working paper w19755, The Nature and Incidence of Software Piracy: Evidence from Windows, Susan Athey, Scott Stern
Users who downloaded this chapter also downloaded these:
Davis, MacCrisken, and Murphy w8411 Economic Perspectives on Software Design: PC Operating Systems and Platforms
Lerner and Zhu w11168 What is the Impact of Software Patent Shifts?: Evidence from Lotus v. Borland
Arora Comment on "The Nature and Incidence of Software Piracy: Evidence from Windows"
Danaher, Dhanasobhon, Smith, and Telang Understanding Media Markets in the Digital Age: Economics and Methodology
Oberholzer-Gee and Strumpf File Sharing and Copyright
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us