How could an editor be dumb enough to send an article back to the author for review? The trick is simple (though also it shouldn't be that hard for editors to see through it, and apparently checking is becoming more commonplace: so what will be the next clever idea as this particular arm's race escalates?). Submit to a journal that asks authors to suggest potential reviewers. (Many journals do this -- one hopes the editor selects some reviewers from an independent list, not just from the author's suggestions!) Then submit a name and university and a false email address, one to a mailbox you control. Then, bingo, if the editor selects that reviewer, you get to write the review.

To reduce your chances of getting caught, you can suggest a real, and appropriate reviewer, just providing an inocuous but false email address (some variant on his or her name @gmail, for example).

Via The Chronicle of Higher Education.

One well-known example: text and banner ads that may sell for only a few cents a click.

But there are always new and fun examples. Today's: a New York Times article about the market for buying Twitter followers. Want to be as popular as Ashton Kutcher?

We economists are pretty expert at answers of the form "pay them the right amount, at the right time, as the right function of observables". But on the interwebs, the question often is how to get people to work harder or contribute more for free. For one thing, a lot of ventures don't bother with things like, well, revenues (at least initially). And often more important, the transaction costs of identifying, contracting with, and setting up and executing payments to a large number of micro-contributors exceed the benefits of paying them.

So, there is much attention to intrinsic motivation: making people feel good enough about what they're doing that they want to do it without something messy, like being paid. A lot of sites have been developing and refining tools like leaderboards and badges to give people a sense of accomplishment, some recognition, perhaps a reputation.

More recently, especially following the explosive success of lo-fi casual social gaming (can you spell F-A-R-M-V-I-L-L-E?), folks are trying to combine gaming with intrinsic motivators, in what is called "gamification". Foursquare does this with its badges; so does Scvngr. A recent article in Incentives Magazine (of course) provides a pretty detailed overview of the emerging gamification industry. A number of firms now sell tools, widgets and platforms allowing folks to gamify any web site.

Games have been used for a while to induce socially useful work: these are usually called "games with a purpose", and their early growth and success is due largely to the work of Louis van Ahn and Laura Dabbish. The idea behind GWAP is to deisgn a game that is intrinsically fun to play, but the playing of which directly produces useful work. One well-known example is the ESP game: two people anonymously matched over the web are shown the same images: they type in labels. The more times they type in the same labels, the more points the score. Meanwhile, labels that are popular are saved as tags for the image. Google uses this system now in its image labeler.

The gamification business generalizes this. The games themselves need not produce useful work: rather , the fun of being able to play them motivates the user to do something (not necessarily the game) that the provider values. For example, customers might stay on a site longer, or engage more so that they remember the site (or develop loyalty) and return later.

I particularly like the following observation from the article, because it touches on the critical importance of storytelling in effective (and persuasive) communication: storytelling. Barry Kirk, solution vice president of consumer loyalty at Maritz Loyalty & Motivation, said, "before slapping badges on everything, make sure your 'game story' is well thought out". He added, "If this were a game, would it be interactive, playful, and engaging? All good games are special experiences, and how to apply gamification is just getting started.”

Last week Jonathan Tasini, a free-lance writer, filed a lawsuit on behalf of himself and other bloggers who contributed -- well maybe not contributed -- their work to the Huffington Post site. His complaint is that Huffington Post sold itself to AOL for $315 million and did not share any of the gain with the volunteer -- well maybe not volunteer -- writers.

The lawsuit complaint makes fun reading, as these things go.

The main gripe (other than class warfare: it's unfair!) seems to be that HuffPo "lured" (paragraph 2) writers to contribute their work not for payment but for "exposure (visibility, promotion and distribution)", yet did not provide "a real and accurate measure of exposure" (paragraph 103). However, as far as I can see, there is no claim that HuffPo ever told its writers that HuffPo would not be earning revenue, nor a promise that it would provide any page view or other web analytic data.

How deceived was Tasini? He's no innocent. In fact, he volunteers (oops! there's that word again) in the complaint that he runs his own web site, that he posts articles to it written by volunteers, and that he earned revenue from the web site (paragraph 15). And he was the lead plaintiff in the famous (successful) lawsuit against the New York Times when it tried to resell freelance writer content to digital outlets (not authorized in its original contracts with the writers). And, gosh, though he was "lured" into writing for the HuffPo, and was "deceived" into thinking it was a "free forum for ideas", he didn't notice that they sold ads and were making money during the several years in which he contributed 216 articles to the site. That's a pretty powerful fog of deception! Maybe Arianna Huffington should work for the CIA.

It's a useful review article, with many examples and a good bibliography. The characterization in nine dimensions is clear and I think mostly useful.

I'm particularly pleased to see that they have given prominent attention to the incentive-centered design issues on which I (and this blog) have focused for years. Indeed, they define crowdsourcing systems in terms of four incentive problems that must be solved (distinguishing them from, say, crowd management systems that only address three of the questions). They define crowdsourcing as "A system that enlists humans to help solve a problem defined by the system owners, if in doing so it addresses four fundamental challenges:

• How to recruit and retain users?
• What contributions can users make?
• How to combine user contributions to solve the target problems?
• How to evaluate users and their contributions?

The first and second are the "getting stuff in" (contribution) problem about which I write. How to get people to make effort to contribute something to the good of others? The fourth is the quality incentive problem, which I usually separate into "getting good stuff in" (positive quality), and "keeping bad stuff out".

Macduff Hughes, at Google, captures the main point I've been making for years: screening out unwanted intruders is an economic problem, and CAPTCHAs are an economic (signaling) mechanism, trying to raise the price sufficiently for bad guys to keep them out.

That people use pseudonyms to write not-arm's-length book reviews on Amazon is no longer news.

But I couldn't resist pointing out this new case, if nothing else as an especially fun example to use in teaching. Dr. Stephanie Palmer, a senior law (!) lecturer at Cambridge University (UK), was outed by her husband, Prof. Orlando Figes, for writing reviews under a pseudonym that savaged the works of his rivals, while also writing a review of a book by her husband that it was a "beautiful and necessary" account, written by an author with "superb story-telling skills." Story-telling, indeed.

A closing comment by the editor of the Times Literary Service, which broke the story: "What is new and is regrettable is when historians use the law to stifle debate and to put something in the paper which is untrue....[Figes's] whole business is replacing a mountain of lies with a few truths".

Via The Guardian.

Yelp has always filtered reviews, trying to remove those that it suspects are biased either too positive or too negative. But of course it makes both Type I and Type II errors, and some of the Type IIs (filtering out valid reviews) may be at the root of some of the extortion claims (or not).

Yelp has now made a rather simple, but I suspect quite favorable change: "http://mashable.com/2010/04/06/yelp-extortion-claims/"it is making all filtered reviews visible (on another page). This transparency, it hopes, will let users see that it is even-handed in its filtering, and that its errors are not themselves biased (or influenced).

Embracing transparency is a strategy that seems to work more often than not in this Web 2.0 age of the Internet. I think it will here. Most folks will never bother to look at the filtered-out reviews, and thus will rely on the very reviews that Yelp thinks are most reliable. Those who do look, if Yelp is indeed being even-handed, will probably find the filtering interesting, but will ignore these reviews in choosing which business to frequent. The main risk to Yelp is likely to be that imitators will better be able to reverse-engineer their filtering formulae.

Deceptive advertising is a standard case of asymmetric information, hidden characteristics variety. The resort has better information, and chooses what to report.

What incentives to induce honesty? As I mentioned above, there are at least two obvious incentives: avoiding a lawsuit (by a government agency or perhaps a class action on behalf of disgruntled customers), and avoiding a loss of customer goodwill if they realize the resort is routinely lying.

How to increase those incentives (since apparently they have not been enough to prevent at least some deception)? One way is to raise the fine or other penalties if prosecuted. Another way, particularly for the reputation effect, is to reduce the cost of getting better information to the consumers.

And...Zinman and Zitzewitz found that the deception has decreased since the release of an iPhone app that aggregates skier reports of local conditions in real time (and that the reduction in exaggeration is much more notable at resorts that have good iPhone reception).

Crowdsourcing: reducing asymmetric information problems.

(Zinman must be pretty happy to have found a co-author with whom he gets first billing in co-authored papers...no mean feat.)

(Via Erin Krupka and the Marginal Revolution blog.)

The arXiv project was started in the 90s as an e-print archive for rapid (pre-journal publication) of research papers in high-energy physics. Paul Ginsparg, a physicist at Los Alamos National Lab, started and maintained it for a number of years. It became a vital service for not just the original community, but for many other scholarly fields (including math, statistics and computer science). It currently houses about 600,000 articles, all freely available to anyone with an Internet connection.

Cornell University took responsibility for the project several years ago. The university librarian reports that Cornell spends about $400,000 a year to maintain and enhance this ever-growing resource, which benefits researchers across the world. It earns no direct revenue from the project. How long is that sustainable?

According to this posting in The Chronicle of Higher Education, Cornell is now asking the 200 institutions whose researchers account for about 75% of the downloads to voluntarily pay $4000 a year to support the project. Not a lot perhaps (the cost of a handful of subscriptions to journals in the related fields), but a request for an ongoing commitment to a charitable contribution. How likely is that to work? How sustainable? National Public Radio in the US receives some government funding, and fully 23% of its budget from corporate advertising. (It is called "sponsorship" because the corporations only get "announcements" and not "advertisements", but as someone whose father made his living in a Madison Avenue advertising firm doing "corporate image advertising", this is advertising. Corporations spend the money to enhance their brand image and reputation, on the belief that this increases their sales.)

Stick: T-Mobile was getting about 7,000 customers weekly to go paperless. In August it added a $1.50 to every print-on-paper bill; the rate went up to about 231,000 per week. Years to full conversion: about 1.25.

Jawbone: T-Mobile's customers screamed. A class action suit was filed alleging this was a change of contract terms. About a month after adding the fee, T-Mobile reversed course and is back to encouraging customers to "go green".\

Via The New York Times.

Lifestyle Lift is a facial cosmetic surgery procedure that purports to be quicker and safer than traditional facelift procedures, with shorter recovery time and cost.

According to the NY State Attorney General's office, employees published anonymous reviews to the web to trick potential customers. They did this on legitimate review sites, and they also created standalone web sites that purported to be independent, where they created all of the "reviews" or edited reviews by third parties to skew the discussion.

See also this New York Times story.

Laws that impose possible fines or other punishments (such as jail time) are an incentives-based approach to shape behavior. A simplified version of the idea is that if the expected cost of the punishment, times the likelihood that the agent will be caught and punished (discounted to present value), is greater than the expected benefit from the improper behavior, it will not be in the agent's self-interest to engage in the behavior.

One concern about using legal punishment incentives is that they involve multiple sources of uncertainty (about punishment size and likelihood of being caught and punished), and that seemingly large ex post punishments may not be that much of an ex ante deterrent.

Lifestyle Lift was fined $300,000 plus legal costs. Suppose that it had known with certainty that it would have to pay this fine several years after earning money as a result of publishing false reviews. Would it have chosen to be honest? That depends, of course, on how many consumers it falsely induced to get the procedure, and the profit on the procedure. According to current customer comments on one review site that claims to have been abused (RealSelf.com), the procedure costs on the order of $5000, only some portion of which will be profit. Suppose that the profit rate is 10% (about $500): then of the "nearly 100,000" customers it claims to have served, Lifestyle Lift would have had to falsely induced at least 600 of them. If many more than 600 had been tricked, then even knowing the fine would occur may not have been sufficient deterrent. Multiply that by the uncertainty and the number of customers they had to successfully trick might have been less (there were also uncertainties about the benefits of lying that would have to be taken into account).

There is at least one reason the incentive might be greater: harm to Lifestyle Lift's reputation. For example, this settlement was reported in the New York Times, and the story is starting to circulate through blogs and other information sources.

On RealSelf.com, where presumably the false reviews have now been removed, 65% say that the procedure is not worth it. Meanwhile, Lifestyle Lift now posts a badge and promised "Internet Code of Conduct" on its own web site, stating that it "is proud to take a leadership role in establishing new standards of Internet conduct and communications." I don't know when that "code" first appeared, but it seems likely that this is an example of trying to turn lemons into lemonade.

Actually, it's not clear that LinkedIn was asking the translators to work for nothing. Apparently it was planning to credit their work, thus offering some compensation in the form of marketing or advertising. And at least for some, this could be valuable compensation. It's not just "free advertising" in the sense of getting to post one's name and profession in a public place. Instead, it's a free demonstration of the professional's work: "Like this translation? It was done by Tom, and here's his LinkedIn page".

There seems to be a fair bit of consensus that a powerful motivator for many people who work on open-source software projects for "free" are doing it to get training (in working in a complex, team-based software engineering environment) and to get publicly documented evidence of their skills (the code checked in and permanently associated with your user account). I've speculated that a similar motivation might explain some who write book reviews (for "free", and which help a for-profit company) at Amazon.com: writing practice with grading by others (without paying nasty tuition), and a public record of one's skills (but how many paid jobs are there to which budding book reviewers can apply these days?).

Hal is a micreconomist par excellence, who has made important contributions to both theory and empirical work. He was one of the first economists who took the study of the Internet and related phenomena seriously.

He was my colleague at Michigan, and involved in some of the early meetings in which a group of us developed the plan to create the School of Information. The year we launched, however, he departed for Berkeley, where a year later he was dean of their new School of Information (called SIMS at the time, but since renamed). For the past few years he has been on leave from Berkeley to be the Chief Economist at Google.

(Scott Adams, http://dilbert.com/strips/, 8 May 2009)