Copyright Piracy as Prey-Predator Behavior

The economic analysis of the piracy of copyright products has used a variety of modeling assumptions, the majority of which are set in typical industrial organization settings. The results of such models are manyfold, but in general they are ambiguous as to the optimal protection strategy, and the effects of protection on the welfare of copyright holders, and on the existence of piracy. Concretely, little has been said about which types of protection mechanisms are most adequate for controlling piracy. In the present paper, we depart from the traditional industrial organization type models, and we analyze piracy in a model that is very familiar to economic dynamics — the prey-predator model. In this model, we show that publicly instigated and financed policies designed to deter piracy can have the effect of increasing the amount of piracy, while privately financed strategies (e.g. DRM) will always decrease piracy.