Indonesia’s Piracy – Prisoner’s Dilemma Case

This morning, when I went to my university, I’m looking around. There’re trees, so green and stand strong at the side of the street. There’re some birds… and their pees I suppose -_-” Many thing is cool about Ganesha street, but suddenly I saw… software seller ?!?! Whoa, wait a minute, there’re no any legal software seller in Indonesia, so that’s must be PIRACYYY ?!?! Whoa, as a developer I can’t stand still knowing this truth, but… the reality is… I am one of their costumer too 😛 So, I think I will let them live today (as if I am the owner of the universe, hahaha).

Well, enough about those silly drama thing 😛 Well, in this article, I want to talk about my analysis on software piracy in Indonesia. Well, as a developer it is clear that this is a bad situation… very very bad… but of course that kind of answer is not enough, so let’s start the formal analysis right now 🙂

Let’s start from the main force in economic, incentive. What’s the incentive for all player ? For the buyer, they can get cheap software. For the seller, they can get good profit of course. On the basis of economic trading, it is good, they both get profit from the transaction and it is a fair trading. But, one thing surely is amiss here. We haven’t calculated the opportunity cost yet. Because of their trading, the opportunity cost is Indonesian developer get a very hard time to sell their product, and at the end many of the developer closed down their business. Whoa, hold on, the cost must be paid by the developer ? That’s definitely not fair. That’s the wrong thing here, developer becoming victim in this rational trading.

Now, to formalize our analysis further, let’s think in prisoner’s dilemma thinking frame (for further reference, you can read Game Theory)

They sold

They don’t sold

I Sold

Equal cost

I am dominating the market

I don’t Sold

I suffer a financial loss

Equal cost

Healthy Developer Environment

Now, when other people sell piracy software, the rational action for me is to sell the product too, because if I don’t, I won’t make any different to my country either, or we can say that my sacrifice would be useless. Now, if other people never sold piracy software, it is still rational dor me to sell, because I can be the market dominator and it can give me a big profit.

In conclusion, whatever the condition, the rational action for individual seller is to keep selling, in short, we are trapped in prisoner’s dilemma.

That’s the power of prisoner’s dilemma. And that’s why we are trapped like… forever ? Even though there’re laws, as long the incentive still lying there waiting to be picked, this event will loop again, again, and again. For weeks I have been thinking about how to overcome this situation (in economic way), but… still no result I afraid 😦 Still don’t have any idea about the incentive structure that needs to be manipulated. I hope some time the answer can be revealed 🙂

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