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Diseconomies of scale in fraud, spam, support, and moderation

danluu.com

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Re: Diseconomies of scale in fraud, spam, support, and moderation

#11

Post by graemep »

roenxi wrote: post #3

> I started seeing a lot of comments claiming that you need scale to do moderation, anti-spam, anti-fraud, etc., around the time Zuckerberg, in response to Elizabeth Warren calling for the breakup of big tech companies, claimed that breaking up tech companies would make content moderation issues substantially worse Well Zuckerberg is correct in context . Politicians don't mean moderation as in everyone is being civil…

I think there is an ambiguity in what you said. TO be clear the conviction was overturned but the news had long been globally disseminated by then.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#12

Post by crummy »

infogulch wrote: post #10

Way back in 2014 when Jeff Atwood (aka codinghorror) switched from Stack Overflow to creating Discourse, he gave a talk about it (see notes [1], sadly I can't find a live link to the recording anymore). He gave a pithy little explanation of why they built the Discourse trust levels system the way they did that stood out to me: > The only thing that scales with the community is the community. The point being, you have…

I wonder how that would work for Facebook, for example. Facebook Groups have admins, but for general posts to the public (or to friends) - could they be user-moderated?

Re: Diseconomies of scale in fraud, spam, support, and moderation

#13

Post by Aurornis »

andy99 wrote: post #7

The real "economy of scale" in these platforms is not actually providing any support , moderation, fraud prevention. It's not that they scale it better, it's just that they don't do it and get away with it through market power. If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. If I'm uber I just ignore it. It has nothing to d…

> If I'm uber I just ignore it. It has nothing to do with efficiency, it's just getting the monopoly power to treat your customers badly and get away with it.

People don’t use Uber because they’re a monopoly. They use it because it’s convenient, it’s a known quantity, it’s mostly predictable, and they can use it almost anywhere they go.

People like to complain about Uber, but my pre-Uber experience with taxi services was far worse. The hypothetical case of Andy’s small town taxi service that provides exemplary service either didn’t exist or was such an outlier that you couldn’t reliably find it while traveling.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#14

Post by alexey-salmin »

MichaelZuo wrote: post #9
andy99 wrote: post #7

The real "economy of scale" in these platforms is not actually providing any support , moderation, fraud prevention. It's not that they scale it better, it's just that they don't do it and get away with it through market power. If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. If I'm uber I just ignore it. It has nothing to d…

>If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. In a very small town, you won't go out of business because you'll be the only taxi service in town. Everyone can establish their 'monopoly power' in a small enough area.

Not really, because the entry barrier to create a small town taxi service is incomparably lower than creating a new Uber.

20 years ago my small town had around five fiercely-competing taxi services with cars arriving within 4-5 minutes of a phone call. In many respects that was better than the new times. Especially when it came to customer service.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#15

Post by graemep »

no_wizard wrote: post #2

What all this says to me, in total, is that greater competition where you have a bunch of potentially medium sized companies or smaller but no clear massive (50%+ market share) leader that power can’t congregate means they have both incentive to provide a better experience and having multiple targets makes it harder on negative actors, effectively. Thats my takeaway here is that we should as a matter of regulation /…

That is true in any market, not just software. There is a large element of regulatory capture that shapes regulation to favour bigger businesses instead of reining them. Software and online services have been particularly bad because there are so many ways to work around regulation. Apple's current malicious compliance with the EU is an egregious one, but most are more subtle (FB persuading regulators to let them take over whatsapp by arguing chat and social media are different markets).

Ideally, IMO, we should aim to prevent monopoly, not just abuse of monopoly (which is what regulators currently do): https://pietersz.co.uk/2009/11/fix-capitalism

Re: Diseconomies of scale in fraud, spam, support, and moderation

#16

Post by cortesoft »

andy99 wrote: post #7

The real "economy of scale" in these platforms is not actually providing any support , moderation, fraud prevention. It's not that they scale it better, it's just that they don't do it and get away with it through market power. If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. If I'm uber I just ignore it. It has nothing to d…

> If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business.

We know this isn’t true, though; taxi services sucked before Uber. In small towns, there wasn’t competition at all, so know reason to fix issues. In larger cities, most taxis were hailed on the street or sent from a central dispatcher, so no individual taxi driver cared about their reputation… people weren’t choosing a specific taxi, and there was little repeat business, so customer service wasn’t important.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#17

Post by alexey-salmin »

Aurornis wrote: post #13
andy99 wrote: post #7

The real "economy of scale" in these platforms is not actually providing any support , moderation, fraud prevention. It's not that they scale it better, it's just that they don't do it and get away with it through market power. If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. If I'm uber I just ignore it. It has nothing to d…

> If I'm uber I just ignore it. It has nothing to do with efficiency, it's just getting the monopoly power to treat your customers badly and get away with it. People don’t use Uber because they’re a monopoly. They use it because it’s convenient, it’s a known quantity, it’s mostly predictable, and they can use it almost anywhere they go. People like to complain about Uber, but my pre-Uber experience with taxi services…

> People like to complain about Uber, but my pre-Uber experience with taxi services was far worse

Did you live in a small city back then?

Re: Diseconomies of scale in fraud, spam, support, and moderation

#19

Post by cortesoft »

alexey-salmin wrote: post #14
MichaelZuo wrote: post #9

Earlier quoted context omitted.

>If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. In a very small town, you won't go out of business because you'll be the only taxi service in town. Everyone can establish their 'monopoly power' in a small enough area.

Not really, because the entry barrier to create a small town taxi service is incomparably lower than creating a new Uber. 20 years ago my small town had around five fiercely-competing taxi services with cars arriving within 4-5 minutes of a phone call. In many respects that was better than the new times. Especially when it came to customer service.

How small a town are we talking about? I grew up in a 100,000 person city and we only had two taxi services that would take ages to arrive, depending on where you were.

Re: Diseconomies of scale in fraud, spam, support, and moderation

#20

Post by CityOfThrowaway »

The author seems to be mistaking the benefit of selection effects with competence.

Those who work anti-fraud for platforms know that there is something like a market for fraud. There is a market clearing quantity of fraud that will be present on any platform, dictated by the gains from learning to execute the exploit, the effort necessary to do so, and the number of times one might be able to do it.

Small platforms have way less fraud because they are way less valuable to exploit, in general. And that's caused by _the very fact that they are small_.

The big platforms actually are radically more competent at anti-fraud / anti-spam / etc, but the scope of their operations make them such juicy targets that there is a lot of it anyways.

It the entire world of fraudsters against Amazon, or Google, or Facebook. That's a highly unequal battle and it's surprising how well the platforms fare, all things considered.

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