Information Asymmetry and Thwarting Spam
Thede C. Loder
University of Michigan - Department of Electrical Engineering and Computer Science
Marshall W. Van Alstyne
Boston University - Department of Management Information Systems; Massachusetts Institute of Technology (MIT) - Sloan School
University of Michigan at Ann Arbor - School of Information
January 14, 2004
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 mechansisms 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.
Number of Pages in PDF File: 11
Keywords: Spam, email, information markets, mechanism design, signaling, screening, warranty, filtering, information asymmetry
JEL Classification: D82, M30, H21, C88, A10, K20, O33
Date posted: January 20, 2004
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