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A welfare analysis of "junk" information and spam filters

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Author Info

  • Josef Falkinger

    ()
    (Socioeconomic Institute, University of Zurich)

Abstract

This paper analyses the equilibrium effects of individual information filters. Information is modelled as advertisements which are distributed across a population of consumers with heterogeneous preferences. An advertisement that provides knowledge about a product with little or no utility for a consumer is considered junk. Filters are characterised by their level of tolerance. The quality of the filter is measured in terms of the share of useful items in the total set of items passing the filter. It is shown that in conditions of decentralised competition, multiple equilibria arise. A social optimum can be achieved by demanding each consumer to reject a certain percentage of advertisements, leaving the choice of what is rejected up to the consumer him/herself.

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File URL: http://www.soi.uzh.ch/research/wp/2008/wp0811.pdf
File Function: first version, 2008
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Bibliographic Info

Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0811.

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Length: 34 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:soz:wpaper:0811

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Keywords: global information society; advertising; junk information; spam filter; Internet regulation;

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References

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  1. Josef Falkinger, 2008. "Limited Attention as a Scarce Resource in Information-Rich Economies," Economic Journal, Royal Economic Society, vol. 118(532), pages 1596-1620, October.
  2. Kyle Bagwell, 2005. "The Economic Analysis of Advertising," Discussion Papers 0506-01, Columbia University, Department of Economics.
  3. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 465-91, October.
  4. Falkinger, Josef, 2007. "Attention economies," Journal of Economic Theory, Elsevier, vol. 133(1), pages 266-294, March.
  5. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
  6. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  7. Falkinger, Josef, 2005. "Limited Attention as the Scarce Resource in an Information-Rich Economy," IZA Discussion Papers 1538, Institute for the Study of Labor (IZA).
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Cited by:
  1. Anderson, Simon P. & de Palma, André, 2009. "Competition for attention in the information (overload) age," CEPR Discussion Papers 7286, C.E.P.R. Discussion Papers.

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