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Why SOPA is Bad to Innovation

By ET

SOPA stands for Stop Online Piracy Act, which is a legislation introduced by the US House of Representatives. Websites like Google and Wikipedia believe this is Internet Censorship and it will cripple the Internet.

Wikipedia showed a blackout page today to protest, and it will last for 24 hours.

In my paper with Feng Zhu (You can download the paper from here.) published in June 2011 in the American Economic Review (AER), we studied the effect of blocks of the Chinese Wikipedia on incentives to contribute.

A direct effect is obviously that many people can no longer contribute to Wikipedia.

The following figure suggests that contributions from China reduced significantly after the block.

The bar chart further compares the contributions from different regions before and after the block.

An indirect effect is that people who were not directly blocked also reduced their contribution significantly. In the paper we estimate that the reduction in contribution from those who are outside China is more than 40% within the 4 weeks after the block.

The next figure shows the number of new contributors. It can be clearly seen that each block (shown in shaded areas) significantly reduced new contributors.

The lesson learned: information needs to be free. Legislation not well thought out may bring unintended consequences.

2 Responses to “Why SOPA is Bad to Innovation”

  1. Wei Says:

    Interestingly, we just discussed SOPA in class yesterday. :) I think SOPA is motivated to block piracy sites. Here is the paper we read:

    http://www.circleid.com/pdf/PROTECT-IP-Technical-Whitepaper-Final.pdf

    It will be wonderful if somebody can write an economics paper on it.

  2. Edmundo Wenzel Says:

    I know it really important to have good bio on any social media because if someone reads it they need to really want to follow you are have you as a friend. Thanks for sharing!

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