
A False Economy Powered by Ads and Lies - midef
https://www.johnwdefeo.com/articles/false-economy
======
Legogris
> When the reward of being dishonest is (seemingly) greater than the risk, no
> person or company is accountable: The entire system is at fault.

This dynamic is a great factor in many overarching issues today. In politics,
it's so easy to get stuck on ideology, ethics or morality. But in practice, it
comes down to incentive structure. And carrot usually works better than tick,
for several reasons.

Consider the problem of tax evasion in retail. Greece is imposing fines on
those who conduct a large enough ratio of their transactions in cash[0].
Taiwan solved this more elegantly in 1951, IMO, with introducing a lottery
with a number coming up on each receipt, thereby creating an incentive for
consumers to ask for a receipt[1].

0: [https://fortune.com/2019/12/16/greece-digital-economy-
cashle...](https://fortune.com/2019/12/16/greece-digital-economy-cashless-
fines/)

1:
[https://en.wikipedia.org/wiki/Uniform_Invoice_lottery](https://en.wikipedia.org/wiki/Uniform_Invoice_lottery)

~~~
gwd
How about this:

1\. Have a way for buyers to report when a seller is bribing them to fake
reviews. If the report turns out to be genuine, give the buyer a small reward
($5/10).

2\. Have Amazon occasionally pretend to bribe people to do fake reviews. If a
user does the fake review, their account is banned for one month. If the user
reports the fake review, they get the small reward.

Between the carrot of reporting fake reviews, and the stick of being banned
for falling for the request, you'd "crowdsource" a lot of the issues.

~~~
elsewhen
“If the report turns out to be genuine”

This still requires the platform to detect _genuine_ transgressions which is
very difficult.

~~~
gwd
> This still requires the platform to detect _genuine_ transgressions which is
> very difficult.

I had in mind situations where a seller contacts a buyer who has left a
negative review, and offers free merchandise for changing the review. If it
happens within Amazon's system, they should be able to verify it.

Obviously an attack you have to defend against is unscrupulous seller E
posting fake review requests on Facebook (or wherever) "on behalf of" honest
seller A, causing Amazon to ban / punish A in the rankings.

------
hirundo
There seems to be a lot less gaming of the negative than the positive reviews.
So on Amazon, etc. I like to read the worst reviews and see if they talk me
out of buying.

I suppose if this approach catches on, scammers will spend more time
denigrating competitors than boosting their own products, and it'll become
less effective.

~~~
JohnFen
I don't know if gaming negative reviews is less common than positive ones (I
assume it is), but there are plenty enough fake negative reviews to cause me
to stop paying any real attention to them too.

I use reviews for only one thing -- to find out about specific tips and tricks
about using whatever the product is. I pay very little attention to how the
reviewer actually rated the product.

------
amiune
That's not a false economy, that's the only economy that started since it's
inception. Information asymmetry and game theory talks a lot about it

~~~
101404
Yep. That's a 100 years of Edward Bernays.

[https://en.wikipedia.org/wiki/Edward_Bernays](https://en.wikipedia.org/wiki/Edward_Bernays)

That's the guy who started it all.

------
ajsnigrutin
What should we/they do?

Even in real-life, you're never sure, when someone recommends a product, be it
a salesman in a brick and mortar store ("this one here is a lot better then
that one there", even at the same price, could mean different profits). With
platforms like youtube, you have atleast minimal trust in a few youtubers you
follow regularly (and this literally means "a few"), but doing a random search
means 80% chance the reviewer got sponsoder or atleast received the product
for free in exchange for a good review. Star systems on sellers pages have
their own sets of issues... usually people don't write reviews at all if the
product is good, and complain only after it breaks (unless they're 'paid' for
the review).

~~~
rchaud
They can do what legacy retailers have done for ages, which is to not stock
goods from fly-by-night sellers. Offer customers choice among established
brands, and eschew becoming the Western version of DealExtreme, AliExpress or
Wish.

I don't see fake reviews of TVs or headphones on Best Buy's site, and I've
begun purchasing from brick and mortar establishments (buying online or doing
instore pickup) more often now. Amazon's supply chain can't be trusted.

~~~
mml
having worked on a system that managed reviews for a certain giant electronics
retailer, I have bad news for you.

~~~
rchaud
I'm less worried about possibly astroturfed reviews if the brand is something
I've already bought from, like Samsung or Sennheiser, or a cheaper but
otherwise reliable one like Anker.

------
lowdose
62% of ad revenue goes to publisher so there is a clear incentive to keep
people outraged.

[https://ibb.co/k8F413r](https://ibb.co/k8F413r)

------
baryphonic
> Two months before the collapse of Bear Stearns, the first investment bank
> claimed by The Great Recession, The New York Times ran a story entitled,
> "Can banks self-regulate?" Clearly, the answer was no. Yet, in the face of
> new regulations that followed, the surviving big banks have grown bigger and
> more powerful than before. A similar situation may play out with big tech
> companies.

I turned skeptical when I read this plus the Upton Sinclair quote. Nothing
about Amazon's marketplace or ad business or even fake reviews is even
remotely close to the financial system pre-financial crisis. AAFG are not
holding the bill for trillions in potential liabilities on highly leveraged
positions in complex derivatives. They're operating a market that doesn't
involve any credit whatsoever outside of payments. Seems like the author has
something of an axe to grind rather than a rational assessment of the risk and
problems.

I don't think it's _good_ that this system is the way it is, but _caveat
emptor_ seems like a perfectly fine solution. I've become more skeptical about
what I buy on Amazon, and I imagine most other consumers have done the same.
If Amazon wants more business from me again, they can improve the quality of
offerings.

~~~
TheOtherHobbes
How is an emptor supposed to caveat if the so-called review system is
systemically dishonest?

Caveat emptor doesn't work, because Amazon has no incentive to improve review
or product quality.

Bezos is rewarded whenever an item is sold. Most items won't be returned
unless grossly faulty or misdescribed. Accurate reviews and more selective
product filtering would decrease his earnings - a strong negative incentive,
if you're someone like Bezos.

With current legislation, the only thing that might improve the situation for
buyers is aggressive competition. As a de facto monopoly, Amazon doesn't need
to worry about that.

Putting it crudely, e-commerce automates and amplifies scamming and
dishonesty. There's limited accountability for sellers and virtually no
accountability for the owner of the marketplace.

In the non-virtual world there are trading standards and other consumer
protection mechanisms. They're not infallible, but they do at least exist.

The online equivalent would be some kind of blanket consumer-good-faith system
which punished fake news, manipulated reviews, and substandard products.

Good luck getting that written and passed as coherent legislation with
adequate enforcement.

~~~
SpicyLemonZest
Amazon isn't a de-facto monopoly by any reasonable definition. Most big box
retailers have online shopping, and Walmart even offers the same delivery
speeds in many areas.

~~~
jerf
One of the biggest long term risks for Amazon's retail business is that they
don't really have a moat. They can beat people logistically, but eventually,
other companies will catch up, and there's probably a diminishing returns
effect on money poured into that. They have Amazon Prime, which was probably
created to try to be a moat, but I think they've had more difficulty making
that a moat over the long term than they may have initially hoped. Why would I
pay for faster shipping if Wal-Mart pretty much offers it by default? Tacking
on a lot of mediocre streaming services is a weird way to add value to that.

(AWS has a lock-in moat. Once you're in, you will find it harder and harder to
leave over time. True of all the clouds, but that plays in favor of the
biggest which at the moment AWS is.)

If you look, you can kinda see a lot of flailing on Amazon's part over the
past several years trying to figure out how to build a moat around their
retail in a lot of ways; Amazon Basics, various games around Prime, trying to
convince people to buy retail through Alexa which is hard-coded to Amazon, of
course, etc. Almost everything the retail side is doing amounts to that in the
end.

~~~
blackrock
I don’t trust Amazon to buy important things. Like expensive electronics. Or
things where the risk of counterfeits are too high. I’d rather buy it from
Target, and pay more, because I can get access to reliable customer support.

------
blackdogie
Until marketplaces are fined by the FTC directly for enabling I think this
will continue to grow as an issue.

------
Zigurd
As of the middle of 2019 Google continued to be inundated with fake business
listings, some of them are outright scams and fraudsters who harm consumers.
All of them are intended to harm local businesses by making them invisible
compared to the fake listings. I have not heard of Google finding a solution
to this problem.

Some specific fields, like dentistry, seems to be flooded with SEO that is
meant to prevent price comparison research. I'm no expert in ad fraud but I
suspect the most polluted categories are the ones with very high click-through
revenue.

While there are many things Google gets right, including fighting SEO where
revenue is not much at stake, they have obvious perverse incentives to ignore
these problems as well as the way fake reviews contribute to these problems.

------
peter_d_sherman
We need a review site linked to hard identity + purchase verification +
ability to see all other reviews by that reviewer (how many things do they
review, in what categories, and are they potentially biased? Also, for complex
products, do they have any authoritative credentials that might make them
subject matter experts?) + ability for other reviewers to review reviewers,
sort of like a peer rating system...

~~~
quadrangle
Not what you're suggesting, but a site with at least ethical aims (and
potentially additional features for things you bring up):
[https://lib.reviews/](https://lib.reviews/)

------
tomp
We can criticise the regulators as not doing enough and complain that they
lack resources, but the reality is, they don’t need to compete with (and beat)
tech giants, they only need _teeth_. Ideally the regulator (FTC or whatever)
would just write some sensible laws (e.g. no fake reviews or no lies in ads),
then burden the tech giants themselves with enforcing these laws... then
investigate not necessarily _non-compliance_ (i.e. evidence of fake reviews),
but also lack of process, i.e. the inability to detect _potential_ fake
reviews... and of course impose humongous fines (% of worldwide revenue, a la
GDPR but actual fines, not just threats).

~~~
nkingsy
This is exactly how things are currently done (DMCA, “sex work” search
results), and it leads to more people being outraged by big tech companies
acting as judge jury and executioner.

~~~
freeone3000
But it works.

~~~
rusticpenn
You should talk to all the indie youtubers who had their videos taken down by
DMCAs

~~~
freeone3000
Yes. Their videos are still down. It works.

------
fyrefoxboy12
This is a failure of lack of regulation, as human nature is to go too far in
order to understand how far they can go.

Therefore, some of us will always take it too far until we reach the wall.
This wall cannot be built by ethics or morals or any "self-regulation". It
needs to be externally built, and well-enforced.

------
curiosity_100
It shocks me we don't have a place to read honest reviews. Where professional
reviews who get paid will test things and give an honest opinion, anonymously,
so they won't be bribed, and you can go there to read what they say and see
their rating.

~~~
Spare_account
In the UK we have 'Which', a private organisation that does not allow
advertising in its magazine or website to avoid conflicts of interest. I
understand that their reviews are impartial. They prioritise features that do
not always overlap with my own preferences so their 'best buy' recommendations
are not always aligned with my personal preference, BUT their reviews are very
thorough and I purchase a membership whenever I plan to buy a significant
item.

------
qrbLPHiKpiux
> Machines aren’t going away, but they are learning from us - both our lies
> and our truths.

Respectfully, I disagree.

Programmers are responsible. Machines only follow the instructions humans tell
it to follow.

Everyone who codes should really look at themselves in the mirror now and
then.

~~~
notacoward
> Machines only follow the instructions humans tell it to follow.

I suggest that you read something about AI and ML. The "instructions" that go
into these pipelines are many levels removed from the outputs. It's like
saying that cells only follow the DNA instructions given to them - ignoring
evolution, mutagens, exogenetics, etc. The original instructions don't tell
anywhere near the whole story.

Is the opacity of these algorithms a problem? Yes, it surely is, precisely
because the machines are _not_ just following instructions in any meaningful
sense.

~~~
jazzyjackson
Just because the instructions are convoluted and implemented by people who
don't code the math themselves doesn't mean the outcomes are removed from the
inputs. It's still a machine.

Heuristics use random number generators and produce random (non-deterministic)
results, is that not following instructions written by programmers?

~~~
notacoward
> is that not following instructions written by programmers

Not in any useful sense. Everything's deterministic with perfect knowledge,
but nobody has perfect knowledge. The universe is still a machine too, and yet
somehow manages to surprise us anyway. As soon as you inject non-replicable
random numbers into the process, "following instructions" isn't entirely true
any more.

------
naringas
what about the underlying currency system which depends _only_ on everone's
trust in it?

there's very little which keeps fiat money connected to reality...

~~~
quadrangle
Except some enormous military power and other law enforcement requiring the
payment of taxes in the fiat currency…

------
fhood
Luckily products from well established companies are still free from fake
reviews (on Amazon) by and large. As long as you avoid the hordes of 5 star
products with very generic brand names that you have never heard of, you can
still trust reviews to have some degree of accuracy.

Not to say that the suspiciously cheap product with near perfect reviews that
always shows up at the top is always the wrong choice. I bought a knock off
dremel for $20, and later ended up using it to cut quite a bit of 1.8in mild
steel and it performed great. Only a little bit of smoking from the internals.
On the other hand, I bought a cheap microphone from the same style of seller,
and it was an unmitigated piece of garbage.

