Spam and Beyond: An Information-Economic Analysis of Unwanted Commercial Messages

The phenomenon of unwanted commercial messages (UCM), including e-mail spam and emerging forms that target other Internet communications facilities, is analyzed from an information-economics perspective. The UCM industry is characterized as a tragedy of the commons. UCM traffic pays off for its senders when it is noticed and consumed by Internet users, and the industry is, therefore, dependent on a common-pool resource that is accessed through an information asset. An analytical model of the industry is derived and solved computationally, and two dimensions of information quality held by the senders of UCM traffic are manipulated in the model. It is shown that such manipulations can moderate over time both the number of UCM campaigns undertaken and the amount of Internet bandwidth consumed by UCM. Improved filtering reduces the amount of traffic that penetrates an Internet user’s attention space, but actually increases the amount of Internet bandwidth consumed, and will not lead to the elimination of UCM. It is also shown that both public and private entities have adopted policies and practices that have had unintentional informational side effects that have tended to increase, rather than reduce, spam e-mail traffic. It is concluded that the lessons learned from the case of e-mail spam can be applied to the development of policies and practices for mitigating newer, emerging forms of UCM, including versions targeting instant-messaging systems and web logs. The paper adds a third category of remedies to the literature on commons problems: information-based approaches.