spamonomics - the economics of spam fighting

externalities

Spam is the environmental pollution of the knowledge economy. Everybody's welfare is degraded by a few, who make a buck. Most of the cost of spam is borne by internet service providers (bandwith, processing) and end users (lost productivity, computer crime).

Spammers face a skewed price mechanism: their balance sheets show all the profits, but only a fraction of the real costs of their activity. Predictably, overproduction results.

asymmetric information

Spam shows up at an ISP's mail servers in a situation of asymmetrical information: the sender knows it's spam, the mail server is unsure whether this is spam, or maybe a legitimate email.

Now it gets interesting. The ISP uses signals to overcome it's information disadvantage.

First of all, the ISP checks the sender's reputation against public and internal blacklists. Is this a known spammer? Shut the door.

Second, greylisting kicks in (see earlier post). If the sender is neither blacklisted nor whitelisted, we're going to extract a signal by initially refusing to process the email. If the sender retries, that signals he's more likely to be a legitimate mail sender.

game theory

It would be very easy to fake this signal for a spammer - he just has to submit his emails more than once. Yet he doesn't. It is easier to just target another victim mail server that has no greylisting filter. Yet.

This introduces a cost differential between those ISPs that have greylisting, and those that don't. The latter spend more resources on content scanning. After a while, they'll introduce greylisting too, to cut down on spam.

Ultimately, when a sufficient proportion of ISPs uses greylisting, the spammers will have to learn how to fake a "sincerity" signal and reduce the effectiveness of greylisting.

innovation diffusion

As shown above, the effectiveness of a specific ISP's anti-spam countermeasures is dependent on whether this ISP is ahead of the curve or a laggard in introducing countermeasures.

The continuous battle between improved anti-spam measures and new spamming tricks, creates a never ending pressure on any ISP to keep improving the anti-spam infrastructure.

network effects

Network externalities arise from the cooperation between ISPs to combat spam. I'll refrain from going into networking externalities and innovation diffusion in an open source context, since that's a complete topic in it's own right.

Suffice to notice, in this context, that being able to do

# apt-get install postfix-policyd

Posted by Guido Stevens in infonomics at 12:29 | Permalink | Comments (0) | Trackbacks (0)

Defined tags for this entry: asymmetricinformation, economics, email, externalities, gametheory, greylisting, infonomics, innovation, spamfilter, spamonomics

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