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An Economic Response to Unsolicited Communication

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Author Info
Theodore Loder (University of Michigan)
Marshall Van Alstyne (Boston University & MIT)
Rick Wash (University of Michigan)

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Abstract

If communication involves some transactions cost to both sender and recipient, what policy ensures that correct messages -- those with positive social surplus -- get sent? Filters block messages that harm recipients but benefit senders by more than transactions costs. Taxes can block positive value messages, and allow harmful messages through. In contrast, we propose an ``Attention Bond,'' allowing recipients to define a price that senders must risk to deliver the initial message.The underlying problem is first-contact information asymmetry with negative externalities. Uninformed senders waste recipient attention through message pollution. Requiring attention bonds creates an attention market, effectively applying the Coase Theorem to price this scarce resource. In this market, screening mechanisms shift the burden of message classification from recipients to senders, who know message content. Price signals can also facilitate decentralized two-sided matching. In certain limited cases, this leads to greater welfare than use of even ``perfect'' filters.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Advances in Economic Analysis & Policy.

Volume (Year): 6 (2006)
Issue (Month): 1 ()
Pages: 1322-1322
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Handle: RePEc:bep:eapadv:v:6:y:2006:i:1:p:1322-1322

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Related research
Keywords: call externalities Coase Theorem spam filter information asymmetry UCE email communication advertising screening signaling

Find related papers by JEL classification:
D18 - Microeconomics - - Household Behavior - - - Consumer Protection

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Carl Shapiro, 1982. "Consumer Information, Product Quality, and Seller Reputation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 20-35, Spring. [Downloadable!] (restricted)
  2. William P. Rogerson, 1983. "Reputation and Product Quality," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 508-516, Autumn. [Downloadable!] (restricted)
  3. Eric J. Friedman* & Paul Resnick, 2001. "The Social Cost of Cheap Pseudonyms," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 10(2), pages 173-199, 06. [Downloadable!] (restricted)
  4. Shyam Sunder & Matthew A. Cronin & Robert E. Kraut & James Morris & Rahul Telang, 2003. "Markets for Attention: Will Postage for Email Help?," Yale School of Management Working Papers ysm394, Yale School of Management. [Downloadable!]
    Other versions:
  5. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. B. Curtis Eaton & Ian MacDonald & Laura Meriluoto, 2008. "Spam - solutions and their problems," Working Papers 2008-09, Department of Economics, University of Calgary, revised 07 Feb 2008. [Downloadable!]
  2. Benjamin Chiao & Jeffrey MacKie-Mason, 2006. "Using Uncensored Communication Channels to Divert Spam Traffic," Working Papers 06-20, NET Institute, revised Oct 2006. [Downloadable!]
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This page was last updated on 2008-11-15.

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