Journal Article

A Search-Theoretic Model of the Retail Market for Illicit Drugs

Manolis Galenianos, Rosalie Liccardo Pacula and Nicola Persico

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 79, issue 3, pages 1239-1269
Published in print July 2012 | ISSN: 0034-6527
Published online January 2012 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1093/restud/rds007
A Search-Theoretic Model of the Retail Market for Illicit Drugs

More Like This

Show all results sharing these subjects:

  • Law and Economics
  • Mobility, Unemployment, and Vacancies

GO

Show Summary Details

Preview

A search-theoretic model of the retail market for illegal drugs is developed. Trade occurs in bilateral, potentially long-lived matches between sellers and buyers. Buyers incur search costs when experimenting with a new seller. Moral hazard is present because buyers learn purity only after a trade is made. This model is consistent with some new stylized facts about the drugs market, and it is informative for policy design. The effectiveness of different enforcement strategies is evaluated, including some novel ones that leverage the moral hazard present in the market.

Keywords: Search theory; Drugs; Crime; K42; J64

Journal Article.  15713 words.  Illustrated.

Subjects: Law and Economics ; Mobility, Unemployment, and Vacancies

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.