An Economic Solution to the Spam Problem
by: Thede Loder, Marshall Van Alstyne, and Rick Wash
We explore an alternative approach to spam based on economic rather than technological or regulatory screening mechanisms. We employ a model of email value which supports two intuitive notions: 1) mechanisms designed to promote valuable communication can often outperform those designed merely to block wasteful communication, and 2) designers of such mechanisms should shift focus away from the information in the message to the information known to the sender. We then use principles of information asymmetry to cause people who knowingly misuse communication to incur higher costs than those who do not. In certain cases, though not all, we can show this approach leaves recipients better off than even an idealized or “perfect” filter that costs nothing and makes no mistakes. Our mechanism also accounts for individual differences in opportunity costs, and allows for bi-directional wealth transfers while facilitating both sender signaling and recipient screening.
Thede Loder, Marshall Van Alstyne, and Rick Wash. “An Economic Solution to the Spam Problem” Proceedings of the ACM Conference on Electronic Commerce (EC). New York, NY. May 2004.