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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

#161

Post by Nextgrid »

Animats wrote: post #82

This is easy to fix. Make Amazon responsible for warranting all sales on their platform. Amazon claims they are not the seller, some anonymous party running an ad on their platform is the seller. That was litigated in Pennsylvania, and when it got to the level that Amazon was looking at a major lose, Amazon settled to avoid a precedent. On the ad front, anyone who runs an ad for a third party should have to be able t…

> That was litigated in Pennsylvania, and when it got to the level that Amazon was looking at a major lose, Amazon settled to avoid a precedent.

That seems like a problem in our legal system though. It basically means you can force your opponent through a long & expensive legal process (hoping they'd give up or run out of resources in the meantime) and still not risk anything yourself as you can abort the whole thing the second the tide starts turning against you.

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

#162

Post by Nextgrid »

MattGaiser wrote: post #23
ec109685 wrote: post #8

Amazon selling obviously fake SD cards / flash disks is baffling. It’s super easy to spot and fake disks cost users data, so you’d think they’d take that seriously. https://a.co/d/auXcxrZ ($29 for 1TB as their “overall pick”)

I imagine they make a ton of it back from users who never need anywhere near that much space. I have the non-technical people of my life insist on a terabyte for everything. One of them bought an iPad Pro just to have a terabyte of space. After 8 years of their prior iPad, they had used up all the space (64gb I think) and wanted to be sure they wouldn’t run out.

Keep in mind that these scam devices rarely present themselves as a functional but lower-capacity version.

It's more often the case that the device does present the advertised capacity, but with a massive "black hole" in the middle where any writes are silently discarded.

Depending on your filesystem, you don't need to write much data at all before you're likely to hit this "black hole" and start losing data.

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

#163

Post by probably_wrong »

Nextgrid wrote: post #151
bongodongobob wrote: post #119

Earlier quoted context omitted.

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

> to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Legislation can be changed so people are considered responsible for the abuse that comes from their network unless they can pass the buck to someone else. This will quickly cause those Windows XP machines to fall off the internet unless their owners fancy constantly being bogged down in legal trouble. > Going to get the FBI involved f…

> The alternative is effectively saying that theft under 20 bucks is decriminalized?

Those who tried to convince a police officer to investigate a bike theft can tell you that the threshold is actually higher.

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

#164

Post by nonrandomstring »

jseliger wrote: post #105
nonrandomstring wrote: post #24

There's a lot to unpack in this article, but the key idea is the "myth of big" and that small is beautiful. It should be no surprise that Big-Tech succeeds in part by creating its own powerful mythology. All giant organisations, nations states too, build myths of unique competence, infallibility, and exceptionalism. At the same time it hardly needs saying that scale brings inefficiency, corruption, sluggishness, and…

"the key idea is the "myth of big" and that small is beautiful" Based on a cmd-f, I don't see the words "myth" or "beautiful" in the article, and Luu writes: It's easy to name ways in which economies of scale benefit the user, but this doesn't mean that we should assume that economies of scale dominate diseconomies of scale in all areas. Although it's beyond the scope of this post, if we're going to talk about whethe…

5 + 4

3 * 3

10 - 1

sqrt(81)

I can't see the number 9 anywhere above. Can you find it?

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

#165

Post by RandomLensman »

Denzel wrote: post #31
crummy wrote: post #12

Earlier quoted context omitted.

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?

We're essentially opining about the difference between governance systems. Facebook (like most corporations) operates an autocracy. However, unlike most corporations Facebook generates 100B+ in revenue per year (more than most countries), is worth $1T+ (again, more than most countries), and home to 3B+ users daily lives (trifecta, more than all countries). It's time to acknowledge the company that walks like a duck a…

$100B in revenues for a country of 3 billion would be absolutely tiny (even for a developed country of 30 million people) and in no way enough to support governance systems even vaguely resembling modern governments.

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

#166

Post by godelski »

Nextgrid wrote: post #152
godelski wrote: post #122

Earlier quoted context omitted.

This is why I have a problem with a lot of the legal structure and incentives. If you measure in number of arrests you aren't solving the problems. I'm not sure there's any good metric to measure that. To take an analogy I'll mention the drug war. The main target was always low level drug dealers and users. They're easy to arrest and easy to say you're doing something. But they are fairly inconsequential to the busin…

When it comes to the war on drugs there's a perverse incentive problem - said war provides endless amounts of easy to catch/prosecute crime which can be used to meet & exceed their performance targets without much effort. So there might not be too much incentive to kill this "cash cow" of low-level users/dealers by actually curtailing upstream supply. This might not be too different from the payment anti-fraud indust…

Exactly my point.

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

#167

Post by underdeserver »

Nextgrid wrote: post #151
bongodongobob wrote: post #119

Earlier quoted context omitted.

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

> to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Legislation can be changed so people are considered responsible for the abuse that comes from their network unless they can pass the buck to someone else. This will quickly cause those Windows XP machines to fall off the internet unless their owners fancy constantly being bogged down in legal trouble. > Going to get the FBI involved f…

San Francisco is trying that right now, aren't they? How's that going for them?

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

#168

Post by michaelt »

saagarjha wrote: post #154
faronel wrote: post #129

Earlier quoted context omitted.

From the article as an example of what doesn't scale: "...He was going through emails in his inbox, then responding to questions in the craigslist forums, and hopping onto his cellphone about once every ten minutes. Calls were quick and to the point "Hi, this is Craig Newmark from craigslist.org. We are having problems with a customer of your ISP and would like to discuss how we can remedy their bad behavior in our r…

Why not? It doesn't have to the founder on every call if you are looking to scale.

It depends if your revenue scales as fast as abuse scales.

Amazon should be able to keep on top of fraud easily, twice the sales means twice the revenue means they can afford twice the fraud checks, if they want to. That fake $30 "2tb microsd card" puts $30 of real money in their bank account.

But for something like Twitter, revenue is only vaguely related to number of tweets. That "elon musk wants to give you free dogecoin" tweet doesn't make them a cent.

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

#169

Post by AnthonyMouse »

jakewins wrote: post #132
BrenBarn wrote: post #128

I think the post underestimates the scope of these problems. It touches on it briefly, but I've mostly come to believe that it is in general bad for companies to become extremely large. It's not just an issue of content moderation. One reason that the article does touch on is the detachment from support. Large companies no longer need to care about the individual consumer, so they stop doing so. A sort of corollary f…

> In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful You had me until here. Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :) There’s truth in both sides there - we want nail production to not be done…

> Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :)

There are really two different kinds of economies of scale.

One is the one you ordinarily think of, where you're big enough to amortize certain fixed costs over a lot of units so the fixed costs become a small part of the price. But the scale you need for this isn't all that large in most cases, and more than that leads to rapidly diminishing returns.

The other is market power. You're so big that suppliers and customers and governments have no choice than to deal with you and then you can dictate terms. This is where we're supposed to have antitrust laws, and not have regulatory capture by industry incumbents, and on that front we've failed spectacularly.

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

#170

Post by Anotheroneagain »

godelski wrote: post #150
Anotheroneagain wrote: post #134

Earlier quoted context omitted.

I don't think so, on the contrary, they ignore the dealers in vain hope to catch some "big fish", but there are no big fishes there.

I find that a strange comparison. Certainly there are bigger fish to fry. In both drugs and credit cards there is a whole ecosystem. Cards probably more straight forward as these are typically being sold on websites and you thus have a clear marketplace. Which I'd differentiate a marketplace from a dealer on a corner. Go after the people who are the generators. That's people making the drugs or people stealing the ca…

I mean it's probably a guy who knows someone who can cook meth, rather than a servant of some kingpin who is running a massive drug conglomerate hiding who knows where.
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