Risks Flashcards
Lesson 10 (30 cards)
What is a legacy design in the context of credit cards?
Credit cards are a legacy design
This indicates that the credit card system has been around for a long time and may have outdated features.
What is a common method used by fraudsters to test stolen credit cards?
Run a small, unsuspicious transaction with a retailer with weak controls
Often, these retailers are charities.
What is a possible solution to credit card fraud?
Add small amounts of selective frictions
What are the components of the fraud problem on Airbnb?
Fraudulent chargebacks
What does the algorithm do to combat fraud on Airbnb?
Flags suspicious transactions, then adds friction or blocks directly
What is meant by ‘friction’ in the context of fraud prevention?
Something that blocks fraudster but is easy for an honest user
E.g., additional verification.
What are false positives (FP) and false negatives (FN) in fraud detection?
Errors made by the algorithm in identifying fraudulent transactions
What is the loss function (L) trained to minimize in fraud detection algorithms?
Total loss function L
What was the loss minimized at with ~11% frictioned transactions?
~3 with ~11% frictioned transactions
What is the cost of fraud event (C) assumed in the lecture?
C=10
What is the value (V) of a good user in fraud detection?
V=1
What motivates sellers to buy fake reviews?
Improve competitive position by buying positive fake reviews for themselves and negative fake reviews for competitors
What are the consequences of fake reviews for platforms?
- Users are fooled
- Lower confidence in reputation system
- Reduced motivation to leave feedback
- Reputation systems become less informative
What are the costs for fake review buyers based on?
Costs depend on the particular site
What is an example of a company involved in the fake review market?
Fivestar Marketing
What did the portal Holidaycheck achieve in relation to fake reviews?
Sued Fivestar Marketing and won
What is a common issue with reputation management services?
Many businesses view every negative review as fake and want to remove them
What did Mayzlin, Dover, and Chevalier (2014) find about reviews on Expedia and Tripadvisor?
Hotels with high incentive to fake have more positive reviews on Tripadvisor relative to Expedia
What do Amazon sellers use to recruit fake review writers?
Private Facebook groups
What are the behavioral footprints used in detecting fake reviews?
- Usefulness votes
- Review ‘burstiness’
- Deviation of rating from average
What are network footprints in the context of fake review detection?
Review-reviewer relations and reviewer-reviewer relations
What is the fundamental assumption for detecting fake reviews?
Spammers behave differently than authentic users
What are ‘leakable’ transactions?
Transactions that are more profitable, effective or convenient for users when conducted outside rather than via the platform
What can reduce disintermediation on platforms?
Providing sufficient job monitoring assistance and communication tools
