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"Can Economic Theory Explain Piracy Behavior?," published online in 2003 by Berkeley Electronic Press, reports results for the survey question, "Assume that your friend has a computer program that is priced in retail stores at ______ and that you are very anxious to get. Assume also that you are offered to copy your friend's program for free. What is the maximum amount you would be willing to pay for the program in a retail store under these circumstances? I would be willing to pay ______."9
a. Explain why the values of the variable of interest (NWTPO net willingness to pay for the original) were measured via survey rather than an observational study or an experiment.
b. Can we assume that the reported values of NWTPO are fairly close to what they are "in real life"? Explain.
c. Another survey question asked, "How large a share of your collection of music is illegally copied?" with response options 0-25%, 26-50%, 51-75%, or 76-100%. What are the advantages to permitting four specific ranges of percentages, instead of phrasing it as an open question?
d. Should results for the question described in part (c) be summarized with a mean or with proportions? Explain.
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