Why Are Scam Emails Obviously Scams? A Game Theory 101 Investigation

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There's a good chance you have received a few emails this week that are obviously scams. They tell you that a benefactor wants to pay you an inheritance, that a Nigerian prince needs to transfer money to the United States and will give you a hefty commission, or that you have been billed for a product you most certainly did not buy. They all have the same endgame: to convince you to give up personal information and send money to the sender.

These emails are inherently puzzling. If the purpose of a scam is to convince you that the offer is legitimate, why are scam emails so flagrantly scams? Shouldn't would-be scammers do a better job of hiding their true intentions?

This video explains the answer with the help of a little game theory. Scammers value their time and want to avoid chasing marks that will ultimately not fall victim. As such, they use the game theoretic logic of screening. By sending emails that are obviously scams, wise people never respond. Thus, conditional on receiving a response, the scammer is more likely to convert their time into a score.

The idea for this explanation comes originally from this paper: https://www.microsoft.com/en-us/resea...