Category: economics

Etsy's Threat Modeling

Gabrielle Gianelli has pulled back the curtain on how Etsy threat modeled a new marketing campaign. (“Threat Modeling for Marketing Campaigns.”)

I’m really happy to see this post, and the approach that they’ve taken:

First, we wanted to make our program sustainable through proactive defenses. When we designed the program we tried to bake in rules to make the program less attractive to attackers. However, we didn’t want these rules to introduce roadblocks in the product that made the program less valuable from users’ perspectives, or financially unsustainable from a business perspective.

Gabrielle apologizes several times for not giving more specifics, eg:

I have to admit upfront, I’m being a little ambiguous about what we’ve actually implemented, but I believe it doesn’t really matter since each situation will differ in the particulars.

I think this is almost exactly right. I could probably tell you about the specifics of the inputs into the machine learning algorithms they’re probably using. Not because I’m under NDA to Etsy (I’m not), but because such specifics have a great deal of commonality. More importantly, and here’s where I differ, I believe you don’t want to know those specifics. Those specifics would be very likely to distract you from going from a model (Etsy’s is a good one) to the specifics of your situation. So I would encourage Etsy to keep blogging like this, and to realize they’re at a great level of abstraction.

So go read Threat Modeling for Marketing Campaigns

What's Copyright, Doc?

I blogged yesterday about all the new works that have entered the public domain as their copyright expired in the United States. If you missed it, that’s because exactly nothing entered the public domain yesterday.

Read more — but only commentary, because there’s no newly free work — at “What Could Have Entered the Public Domain on January 1, 2014?

It’s near-impossible to see how our insanely long copyright terms, or their never-ending extensions encourage Dr. Seuss, Ayn Rand, Jack Kerouac or Ian Fleming to keep producing new work. Those authors have been richly rewarded for their work. But it’s easy to see how keeping those works under copyright reduces creative re-use of our collective cultural heritage.

What Price Privacy, Paying For Apps edition

There’s a new study on what people would pay for privacy in apps. As reported by Techflash:

A study by two University of Colorado Boulder economists, Scott Savage and Donald Waldman, found the average user would pay varying amounts for different kinds of privacy: $4.05 to conceal contact lists, $2.28 to keep their browser history private, $2.12 to eliminate advertising on apps, $1.19 to conceal personal locations, $1.75 to conceal the phone’s ID number and $3.58 to conceal the contents of text messages.

Those numbers seem small, but they’re in the context of app pricing, which is generally a few bucks. If those numbers combine linearly, people being willing to pay up to $10 more for a private version is a very high valuation. (Of course, the numbers will combine in ways that are not strictly rational. Consumers satisfice.

A quick skim of the article leads me to think that they didn’t estimate app maker benefit from these privacy changes. How much does a consumer contact list go for? (And how does that compare to the fines for improperly revealing it?) How much does an app maker make per person whose eyeballs they sell to show ads?

Workshop on the Economics of Information Security

The next Workshop on the Economics of Information Security will be held June 11-12 at Georgetown University, Washington, D.C. Many of the papers look fascinating, including “On the Viability of Using Liability to Incentivise Internet Security”, “A Behavioral Investigation of the FlipIt Game”, and “Are They Actually Any Different? Comparing 3,422 Financial Institutions’ Privacy Practices.”

Not to mention “How Bad Is It? – A Branching Activity Model to Estimate the Impact of Information Security Breaches” previously discussed here.

Lunar Oribter Image Recovery Project

The Lunar Orbiter Image Recovery Project needs help to recover data from the Lunar Orbiter spacecraft.

Frankly, it’s a bit of a disgrace that Congress funds, well, all sorts of things, over this element of our history, but that’s besides the point. Do I want to get angry, or do I want to see this data preserved? Yes to both.

First View of Earth from Moon
That’s why I’ve given the project some money on Rockethub, and I urge you to do the same.

Should I advertise on Twitter?

Apparently Twitter sent me some credits to use in their advertising program. Now, I really don’t like Twitter’s promoted tweets — I’d prefer to be the customer rather than the product. (That is, I’d like to be able to give Twitter money for an ad-free experience.)

At the same time, I’m curious to see how the advertising system works. I’d like to understand it and blog about it, but Twitter would like to maintain confidentiality around the program. They’re engaged in white-hot competition with Facebook and Google to be the new advertising platform of the future. At the same time, it’s less transparency than the exceptionally high bar that Twitter has generally aspired to.

That said with the launch of Control-Alt-Hack, my collaborators have stuff to sell and give away. (Not to mention maybe a sales bump for The New School of Information Security?) Or maybe I could promote other books that I think people should read, like “Thinking, Fast and Slow“). Does the nature of what I’m advertising change the calculus? Would advertising the giveaway make it different?

Then again, I do lots of “advertising” on Twitter already–I advertise the book, the game, blog posts, ideas I like. Does paying to bring them to more people dramatically change the equation?

Interestingly (and I think this is something that can be discussed, because it’s visible), I’m offered the chance to promote both tweets and myself.

I’d be really interested in hearing from readers about how I should take advantage of this, and if I should take advantage of it at all.

Taxpayers Stuck With Tab, but not in Seattle

In an article with absolutely no relevance for Seattle, the New York Times reports “With No Vote, Taxpayers Stuck With Tab on Bonds.” In another story to which Seattle residents should pay not attention, the city of Stockton is voting to declare bankruptcy, after risking taxpayer money on things like a … sports arena.

Of course, in Seattle, blah blah it’ll be so profitable, that it’ll make us a world class city while unlocking a stream of buzzwords and nonsense.

No, really. That seems to be the level of public discourse right now. The taxpayers of the region are being asked to pony up as much as 400 million bucks to help a hedge fund manager offload risk. That strikes me as doubly unwise. First, there’s lots of better ways we could allocate a possible $400 million dollars of spending. Second, when making a deal with a hedge fund manager to take risk, you should look for the sucker in the deal. It’s unlikely to be the hedge fund.

Washington State Frees Liquor Sales: some quick thoughts

I hate to let an increase in liberty go by without a little celebration.

For the past 78 years, Washington State has had a set of (effectively) state-operated liquor stores, with identical pricing and inventory. Today, that system is gone, replaced by private liquor sales. The law was overturned by a ballot initiative, heavily backed by Costco.

This is an interesting experiment in letting a little chaos emerge. Unfortunately, it’s not really a transition to a free market, since there are all sorts of licensing restrictions on who may trade in the demon rum. However, there will initially be about 5 times as many legal retailers as were previously present.

The transition is going to be messy. There’s lots of licensed retailers who haven’t obtained inventory. There’s a thousand people who were voted out of their jobs. Change is often messy.

After the transition, I expect prices will be roughly the same because of taxes and fees. What I expect will be much better is the selection and variety, especially of locally produced products from folks like Oola and Pacific Distillery. Many of those businesses were seriously inhibited by the complex and chummy system that was present.

I also expect surprise and look forward to it.

So raise a toast to the slow unwinding of a very silly system of prohibition.

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