On the economic payoff of forensic systems when used to trace Counterfeited Software and content

We analyze how well forensic systems reduce counterfeiting of software and content. We make a few idealized assumptions, and show that if the revenues of the producer before the introduction of forensics (Ro) are non-zero then the payo¤ of forensics is independent of the overall market size, it declines as the ratio between the penalty and the crime (both monetized) goes up, but that this behavior is reversed if Ro = 0. We also show that the payo¤ goes up as the ratio between success probability with and without forensics grows; however, for typical parameters most of the payo¤ is already reached when this ratio is 5.