In the last two decades, the industry has deployed endlessly the rhetoric of the “digital threat” in order to demand harsher measures against digital piracy. Recently, the “digital threat” discourse called for enhanced liability of online intermediaries, especially those whose platforms...

This paper analyzes the optimal choice of pricing schedules and technological deterrence levels in a market with digital piracy where sellers can influence the degree of piracy by implementing digital rights management (DRM) systems. It is shown that a monopolist's optimal pricing schedule can...