Spam Prevention
Overview
Spam email has been a major problem, and everyone who is on the internet suffers from it. There have been many solutions proposed, ranging from technological filters to collaborative labelling to new laws outlawing spam. All of these so far have been minimally effective, and spam is still a major problem.
Imagine an e-mail filter that takes no time to learn your preferences, never makes mistakes identifying spam, and is costless to use. Researchers in the STIET program at Michigan have developed a spam solution that, under certain circumstances, can leave users better off than even such a "perfect" filter. The mechanism hinges on two simple ideas from economics. The first is: people often benefit more through trade than from giving any one party a unilateral veto over a transaction. A filtering mechanism with no way for senders to pay receivers can never do better than give readers a perfect veto over communications.
The trick, of course, is to screen out the undesirable messages but let the desirable messages pass through unimpeded. Then, anyone sending a rejected message is allowed to buy a moment of a reader's time at a price set by the reader. If this works, then all parties are better off. Legitimate senders have gotten their message out - either about a product you might want to buy or about a campaign issue they wanted to bring to your attention - while you've been compensated for the value of your time and attention.
So, how do you set the screen? This hinges on a second idea from economics coupled with a shift in focus from the information available in a message to the information available to a sender. Critically, a person writing a message knows more about the message than the person receiving it, especially before the receiver has read it. Spammers know they're sending spam and your long lost high school buddy knows she's your long lost high school buddy. This presents an "information asymmetry" problem where one party knows something the other doesn't. It's one application of a line of research by Akerlof, Spence, & Stiglitz that received the 2001 Nobel prize.
The solution is to get the party with the information to make a commitment based on that private knowledge. In this case, the idea is to use a warranty. No spammer is willing to pledge that his email isn't spam when he knows that it is. In contrast, your long lost high school buddy knows perfectly well that her message isn't spam and so she can happily pledge that it isn't spam. This works the same way as it does for cars, computers, and other consumer goods. You have much more reason to believe that the car you're buying is a lemon if the seller offers it "as is" than if the seller offers a solid warranty. In this case, however, the buyer gets to choose the size of the warranty, it can be as small as 1¢, and the numbers work heavily in favor of your long lost high school buddy but against the spammer sending millions of messages. This forces marketers to become more focused and less wasteful in their communications.
Another virtue of the mechanism is that it can apply just as easily to spam sent as instant messages, which is a much bigger problem in Europe, or even to telemarketers, who interrupt you at home. It also motivates people to share their contact information on websites and directories instead of hiding it for fear of nuisance interruptions. The mechanism restores control over your attention and contact information to you, the person whose time is otherwise wasted.
The idea is an example of incentive design to solve information problems going on in the STIET program at the University of Michigan. The authors Thede Loder, Rick Wash, and Marshall Van Alstyne are two Ph.D. Fellows in computer science and a professor of information economics. The three have applied for a patent and recently presented their ideas at Microsoft.
UPDATE: (05/01/2004) We will be presenting this work to the Federal Trade Commission on Thursday, June 10, 2004.
Resources
An Economic Solution to the Spam Problem, Thede Loder, Marshall Van Alstyne, and Rick Wash, Proceedings of the ACM Conference on Electronic Commerce, 2004 (ps)
Old Versions and Presentations
An Economic Solution to the Spam Problem By: Thede Loder, Marshall Van Alstyne, and Rick Wash (ssrn)
An Economic Response to Unsolicited Communications Thede Loder, Marshall Van Alstyne, and Rick Wash, Presented at the Workshop on Information Systems and Economics, December 2004
An Economic Solution to the Spam Problem By: Thede Loder, Marshall Van Alstyne, and Rick Wash. Presented at the STIET seminar, Sept 30, 2003. (Slides)
An Economic Solution to the Spam Problem, Thede Loder, Marshall Van Alstyne, and Rick Wash, Presented at the MIT Spam Conference 2004 (slides)
Questions to Answer
- Why have most of the current spam solutions failed?
- Will some of the new spam laws be successful?
- Can we design a mechanism which is incentive-compatible for the reader that encourages the proper behavior in senders?