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I found the following text via Twitter in Wall Street Journal (here is the link to the original, full article). Further disclaimer: I already ordered the book listed at the end – I find them all really good. Here it comes:

“…Seducing people into sorting themselves into different categories can be all sorts of useful—and not just in admirable ways.

Have you, for instance, ever received an email from someone purporting to be a government official from Nigeria, or perhaps a deposed prince or billionaire’s widow from that country, asking for your assistance in securing a large fortune?

Of course you have! The writer, in florid language, describes the millions of dollars he has the rights to, if only he could extract it from some rigid bureaucracy or uncooperative bank.

That’s where you come in. If you will send along your bank-account information, the widow or prince or government official can safely park the money in your account until everything is straightened out. Of course, you may need to advance a few thousand dollars for upfront fees. But you’ll be richly rewarded for your trouble.

Variations of this scam have been practiced for centuries. Today, it lives primarily on the Internet and is often called the Nigerian scam because more emails of this sort invoke Nigeria than all other countries combined.

Which might lead you to wonder: If the Nigerian scam is so famous, why would a Nigerian scammer ever admit he is from Nigeria? That was the question Cormac Herley, a computer scientist at Microsoft Research, began to ask himself.

He’d never thought much about the Nigerian scam until he heard two people mention it from opposite angles. One talked about the billions of dollars the scammers earn. The other noted how stupid these scammers must be to send out letters full of such outlandish stories. How, Dr. Herley wondered, could both statements be true? If the scammers are so dumb and their letters so obviously a scam, how could they be successful?

He began to examine the scam from the scammers’ perspective. (An August 2012 article in these pages discussed Dr. Herley’s research.) For anyone wishing to commit fraud, the Internet has been a wondrous gift: It makes it easy and cheap to send out millions of bait letters to potential victims. But converting a potential victim into a real one will require a good deal of time and effort.

Imagine that for every 10,000 emails you send, 100 people take the initial bait and write back. The 9,900 who trashed your email haven’t cost you anything. But now you start to invest significantly in those 100 potential victims. For every one of them who wises up or simply loses interest, your profit margin decreases.

How many of these 100 will end up actually paying you? Let’s say one of them goes all the way. The other 99 are, in the parlance of statistics, false positives.

Internet fraud is hardly the only realm haunted by false positives. Roughly 95% of the burglar alarms that U.S. police respond to are false alarms, at a yearly cost of some $2 billion. One recent medical study found an astonishingly high rate of false positives—60% for men, 49% for women—among patients who were regularly screened for various cancers.

So how can a Nigerian scammer minimize his false positives?

Dr. Herley, while modeling this question, identified the most valuable characteristic in a potential victim: gullibility. Who else but a supremely gullible person would send thousands of dollars to a faraway stranger based on a kooky letter?

But how can a Nigerian scammer tell who is gullible and who isn’t? He can’t. Gullibility is, in this case, an unobservable trait. But the scammer could invite the gullible people to reveal themselves.

How? By sending out such a ridiculous letter—including prominent mentions of Nigeria—that only a gullible person would take it seriously. Anyone with an ounce of sense or experience would immediately trash the email. “The scammer wants to find the guy who hasn’t heard of it,” Dr. Herley says. “Anybody who doesn’t fall off their chair laughing is exactly who he wants to talk to.” Here’s how Dr. Herley put it in a research paper: “The goal of the e-mail is not so much to attract viable users as to repel the nonviable ones, who greatly outnumber them.”

So if your first instinct was to think that Nigerian scammers are stupid, perhaps you have been convinced, as Cormac Herley was, that this is exactly the kind of stupid we should all aspire to be. The ridiculous-sounding Nigerian emails seem to be quite good at getting the scammers’ massive garden to weed itself.

This essay is adapted from the latest book by Messrs. Levitt and Dubner, “Think Like a Freak,” which will be published on May 12 by Morrow. Their previous books include “Freakonomics” and “SuperFreakonomics.””

 

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