11 Pages Posted: 20 Jan 2004
Date Written: 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.
Keywords: Spam, email, information markets, mechanism design, signaling, screening, warranty, filtering, information asymmetry
JEL Classification: D82, M30, H21, C88, A10, K20, O33
Suggested Citation: Suggested Citation
Loder, Thede C. and Van Alstyne, Marshall W. and Wash, Rick, Information Asymmetry and Thwarting Spam (January 14, 2004). Available at SSRN: https://ssrn.com/abstract=488444 or http://dx.doi.org/10.2139/ssrn.488444