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An Economic Response to Unsolicited Communication
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Theodore Loder
Published/Copyright:
March 4, 2006
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.
Keywords: call externalities; Coase Theorem; spam; filter; information asymmetry; UCE; email communication; advertising; screening; signaling
Published Online: 2006-3-4
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
call externalities;
Coase Theorem;
spam;
filter;
information asymmetry;
UCE;
email communication;
advertising;
screening;
signaling
Articles in the same Issue
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- Second-Best Climate Agreements and Technology Policy
- An Economic Response to Unsolicited Communication
- Does the Open Economy Assumption Really Mean That Labor Bears the Burden of a Capital Income Tax?
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- The Impact of Midwifery-Promoting Public Policies on Medical Interventions and Health Outcomes
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