ABSTRACT Using a conceptual model of piracy, this paper identified four categories of factors which influence consumer behavior with respect to music piracy: economic, demographic, risk, and culture. A particular emphasis was placed on the importance of cultural and risk aspect in music piracy in this paper. It takes into account a large sample of micro-level behavioral data of university students from the U.S. and Switzerland. We show that despite the fact that these countries are two western, industrialized and technologically advanced nations, students have differences in national culture and they view and treat copyright differently, which ultimately affects the propensity to engage in music piracy. Our results show that consumer behavior can differ even among developed and technologically advanced countries. We show that compared to Swiss students, American students are more likely to engage in music piracy. With respect to the demographic factors, male students are more prone to piracy, whereas older students are less likely to engage in such activity. Finally, the key risk variables perceived probability of getting caught when conducting such illegal activity and the resulting penalty to be paid are negatively associated with music piracy behavior. This paper provides important insights which can be used to have tailored policies to alleviate piracy behavior in each country. Keywords: copyright, consumer behavior, culture, piracy, risk (ProQuest: ... denotes formula omitted.) 1. Introduction People from different societies or cultural backgrounds have various perspectives of how individuals perceive, react and respond to activities that carry risks, either physical or legal. This represents the cultural norms that individuals learn, among others, in their childhood and their social-environment when they grow up, and it plays a significant role in the way they behave. This paper looks at music piracy over networks like the Internet (e.g., peer-to-peer file sharing), with a specific focus on the importance of culture and risk aspects on the consumer piracy behavior. Prior studies on the determinants of piracy have focused primarily on the role of costs and monetary constraints along with risk perceptions. Yet, virtually no study has incorporated culture and risk perception as variables to explain how an individual's behavior is influenced by one's relatives, peers, and social-environment, which ultimately affect actual behavior. Measures to address piracy cannot be effectively developed without knowing the underlying motivations for individuals to engage in such activity. In this paper, we investigate the root causes of individual piracy behavior by identifying key factors influencing this behavior, with emphasis on how cultural and risk variables influence the piracy behavior. Using a large set of survey data of students from the U.S. and one from Europe with Swiss students, we examine the differences in cultural and risk perceptions that ultimately determine piracy behavior. University students are an ideal target for this purpose because they exhibit many homogeneous consumption habits along with significant peer interaction. University campuses have been reported as being a place of massive illegal file sharing due to their technological infrastructure, high speed Internet access, and the fact that students account for a considerable proportion of all consumers where copying and sharing are prevalent [Bhattacharjee, et al. 2006]. Many students have greater knowledge and access to engage in file sharing compared with other groups of the adult population, which make them of greater interest for a study of this kind as they consume large amounts of digital content. Thus, the target subjects of this study are students, a group that has already been spotlighted as being more prone to copyright violations than the general public and which has already been used in other studies dealing with intellectual property and piracy [e. …
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