The reasons you cite are problems with barter as a method of exchange, I.e after production has taken place. But attention and information are produced at the moment they are exchanged. So this gain can offset the other problems. Indeed they must otherwise you would be paying a subscription to me and your favorite cable tv shows.

I am not saying the micro part if it is necessary in this conclusion but in practice it seems to be a part of it.

Jeff: I really liked the part about micropayments and microbarter; I’ll just point out that Hulu has been doing this for awhile (every now and then, to watch a show, you can either choose to watch ads *or* participate in a “short consumer survey” to have an “ad-free experience”).

As to trying to do this on a bigger scale, I think there’s someone out there – beyond just the survey world – who’s trying to do this. I don’t remember who, and I’m not even sure exactly what to Google for it, but someone came up with the idea that, if advertisers really wanted our attention, we should be able to sell it to them.

As for surveys and the problem of people with the least value for their time, there are some companies that have found the solution to that one: pay people differentially. So – yes, the person-with-low-time-value gets paid a pittance (and there are lots of them), but more valuable people get paid more money. One company I know of even has doctors, lawyers, etc., on their panels; users just have to pay much more to have access to them (far beyond what most people would think of as “micro,” and not bartering but actual transfer of cash).

Again – very interesting stuff. Thanks!

These markets exist, sort of. If you google “make money answering surveys” you can find a million sites like this one: http://www.swagbucks.com/

But the reason this hasn’t taken off seems pretty obvious. There’s an extreme adverse selection problem when you try to set up a market to pay people for their time: you get people with the lowest value of time. That’s fine for hiring unskilled labor, but it’s probably not who advertisers want. I’m guessing the only people who fill out these surveys are housewives, teenagers, and unemployed people.

By using barter instead of cash, you can attract a more selected sample who value the thing you’re trading. The Wall Street Journal can keep its ad rates high because kids on summer break want to trade their attention for cash, not for WSJ articles. If the advertisers tried to cut out the middleman and paid people directly to look at ads, it would get a slightly different sample of people.

I wonder if this is why Amazon defaulted its new Kindles to be ad-supported — not because too few people would pay extra to avoid ads, but because the people who would are the ones advertisers wanted.

(There’s also a policy angle here. This is why it can be more effective for a welfare agency to provide in-kind services instead of cash transfers even when the agency has no comparative advantage in provision. With in-kind services — low quality housing, say — people who don’t need the service don’t bother signing up.)