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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)

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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 Format: application/pdf
File Function: first version, 2008
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Publisher Info
Paper provided by University of Zurich, Socioeconomic Institute in its series 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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Related research
Keywords: global information society; advertising; junk information; spam filter; Internet regulation;

Find related papers by JEL classification:
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
M38 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Government Policy and Regulation
D18 - Microeconomics - - Household Behavior - - - Consumer Protection

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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. Kyle Bagwell, 2005. "The Economic Analysis of Advertising," Discussion Papers 0506-01, Columbia University, Department of Economics. [Downloadable!]
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  2. Falkinger, Josef, 2007. "Attention economies," Journal of Economic Theory, Elsevier, vol. 133(1), pages 266-294, March. [Downloadable!] (restricted)
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  3. 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. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
    Other versions:
  5. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213. [Downloadable!] (restricted)
  6. Josef Falkinger, 2005. "Limited Attention as the Scarce Resource in an Information-Rich Economy," IZA Discussion Papers 1538, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Butters, Gerard R, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Blackwell Publishing, vol. 44(3), pages 465-91, October. [Downloadable!] (restricted)
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