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Via Alex Tabarrok, here’s a fascinating little paper about the offshore industry that’s grown up around the business of solving CAPTCHAs, those annoying distorted pieces of text that commenting systems often require you to solve before you’re allowed to leave a comment. The idea is to eliminate machine-based spam, but it turns out that it’s so cheap to pay people to solve them that it’s hardly worth bothering with algorithmic hacks at all. CAPTCHAs, say the authors, “can increasingly be understood and evaluated in purely economic terms; the market price of a solution vs the monetizable value of the asset being protected. We examine the market-side of this question in depth, analyzing the behavior and dynamics of CAPTCHA-solving service providers, their price performance, and the underlying labor markets driving this economy.”

And just how much does it cost to employ banks of computer serfs to do this work? Surprisingly little! The table below shows the going rates per thousand CAPTCHAs solved.

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