Should we set up do not call for person-to-person calls?

After a long journey, our paper on privacy externalities is finally accepted for publication in Management Science!  Let me explain what we did in that study here.

Essentially, we analyzed the pattern of do not call (DNC) registrations in the USA, which had opened the registry since June 2003.  We found a robust externality between consumer registrations -- as more consumers register in a market, the number of subsequent registrations in the same market increases.  We believe (and have found evidence) that this is because the DNC registry sorts consumers into two groups, those who are not interested in telemarketing offers and those who may be interested.  So, with the DNC, the remaining consumer pool may have a higher interest in promotions, which had increased marketers' profitability from making the calls.  Naturally, marketers responded by more solicitations.

Moral of the story:

• A DNC covering person-to-person calls may help marketers (instead of hurt them as intuition or common wisdom would suggest); 
• Marketers should try to avoid excessively soliciting the remaining pool -- these are people who may be interested in the offers provided you don't over-do it.  The last thing we want is all consumers register their telephone numbers;
• The government or the industry should find ways to match interested consumers and marketing promotions.  My other paper in Management Science in 2008 had suggested and analyzed call filtering (what we call "deflection" in that study) as one possible solution.  To facilitate filtering, a registry for telemarketers would be helpful.

I have also written some of these insights in an op-ed which was published in SCMP on Monday. See here.