IPR Protection in the High-Tech Industries: A Model of Piracy

This article investigates the relation between the level of publicness of digital goods – i.e. their degree of non-excludability and non-rivalness – and the pirating behaviour of the consumers. The main focus is put on the difference between the ex-ante level of publicness – determined by the anti-piracy strategies of the firms – and the ex-post level of publicness – which is a consequence of external factors such as the consumers network structure, the consumers sharing behaviour, etc. The two models developed in the article detail the required conditions for anti-piracy strategies to be successful and show the influence of the economic environment on these conditions.