Fighting Fraud from an Economic Perspective Marshall Van Alstyne Boston University Thursday, September 1, 2011 Noon-1pm, NSF Stafford I, Room 110 Abstract: Building trustworthy systems has always been difficult. Technology solutions, being unable to guarantee perfect trust, often resort to cost benefit analysis. This leads naturally to design from an economic perspective. This talk will present two main ideas. Idea #1 will show how a market mechanism can simultaneously fight intentional misuse of communication, such as spam, as well as the malware used to send it. An economic approach helps solve both the information asymmetry problem regarding a sender’s true versus declared intentions and the misalignment of incentives permitting malware to go undiscovered. Idea #2 builds on an open source insight that “with a million eyeballs, all bugs are shallow.” If market malfeasance is a form of bug, then mechanism design can be used to identify fraud and create systems that are self-healing. Speaker: Prof. Van Alstyne’s work concerns information economics. In designing information goods, this research concerns competitive strategy and network effects. In control over information, it concerns who has access to what information, when, and at what price. Work also balances open source principles against those that generate profits and stimulate innovation. Professor Van Alstyne was among the first to document productivity effects of IT and communications at the individual desktop …
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