The optimal level of technical copyright protection:A game-theoretic approach

Immaterial information products (“content”) can be represented in digital form, which is anadvantage but also a source of problems. It is fundamentally impossible to prevent copyingof digital data, which is just a stream of bits – ones and zeros: Once you can read it, you cancopy it. With the help of copying techniques it is very easy and cheap to make an unlimitednumber of perfect copies of an original digital media product. This can lead to massiveinformation product piracy1, i.e. illicit copying of copyrighted work, resulting in detrimentaleffects on the media industry and the society as a whole.2In a situation where it becomes almost impossible to enforce intellectual property rights on anend customer level and content turns to a “perfect public good”3, media companies look forself-help mechanisms to ensure their means of existence. Digital Rights ManagementSystems (henceforth referred to as DRMS) use technical copyright protection measures toprotect content against digital piracy....