Aggressive sales tactics on the internet and their impact on American consumers

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In May 2009, Chairman Rockefeller launched an investigation into a set of controversial e-commerce business practices that have generated high volumes of consumer complaints. Since that time, Commerce Committee staff has been investigating three Connecticut-based direct marketing companies - Affinion, Vertrue, and Webloyalty - as well as the hundreds of online websites and retailers that partner with these three companies to sell club memberships to online shoppers. Although this investigation is not yet complete, it is clear at this point that these three companies use highly aggressive sales tactics to charge millions of American consumers for services the consumers do not want and do not understand they have purchased.

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Human attention is a scarce resource, and lack thereof can cause severe security breaches. As most security techniques rely on considerate human intervention in one way or another, this resource should be consumed economically. In this context, we postulate the view that every false alarm or unnecessary user interaction imposes a negative externality on all other potential consumers of this chunk of attention. The paper identifies incentive problems that stimulate overconsumption of human attention in security applications. It further outlines a lump-of-attention model, devised against the backdrop of established theories in the behavioral sciences, and discusses incentive mechanisms to fix the misallocation problem in security notification, for instance the idea of a Pigovian tax on attention consumption.
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