Fighting Fraud from an Economic Perspective


Marshall Van Alstyne
Boston University

Thursday, September 1, 2011
NSF Stafford I, Room 110


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.


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 level. His work has received an NSF Career Award, two best paper awards, and has appeared in Science, Management Science, Harvard Business Review, and the popular press. Professor Van Alstyne received a BA from Yale, and MS & PhD degrees from MIT. He is an Associate Professor at Boston University and a Visiting Professor at MIT. Web page: