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Reputation in the Internet black market: an empirical and theoretical analysis of the Deep Web

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  • HARDY, ROBERT AUGUSTUS
  • NORGAARD, JULIA R.

Abstract

This paper is an analysis of the role reputation plays in the Deep Web using data from the Internet black-market site, The Silk Road. This encrypted online marketplace employed cryptocurrency and functioned over the Tor network. Utilizing a modeling technique, informed by trade auction theory, we investigate the effect of seller reputation. Analysis of the seller's reputation gives us insights into the factors that determine the prices of goods and services in this black marketplace. Data on cannabis listings is parsed from the Silk Road website and covers an 11-month time period, from November 2013 to October 2014. This data demonstrates that reputation acts as a sufficient self-enforcement mechanism to allow transactions. These findings exemplify the robustness of spontaneous order with respect to the Deep Web as an emergent marketplace.

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  • Hardy, Robert Augustus & Norgaard, Julia R., 2016. "Reputation in the Internet black market: an empirical and theoretical analysis of the Deep Web," Journal of Institutional Economics, Cambridge University Press, vol. 12(3), pages 515-539, September.
    • Handle: RePEc:cup:jinsec:v:12:y:2016:i:03:p:515-539_00
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    Cited by:

    1. Harris, Colin, 2018. "Institutional solutions to free-riding in peer-to-peer networks: a case study of online pirate communities," Journal of Institutional Economics, Cambridge University Press, vol. 14(5), pages 901-924, October.
    2. Romi Kher & Siri Terjesen & Chen Liu, 2021. "Blockchain, Bitcoin, and ICOs: a review and research agenda," Small Business Economics, Springer, vol. 56(4), pages 1699-1720, April.
    3. Erwin Dekker & Pavel Kuchař, 2024. "Markets and knowledge commons: Is there a difference between private and community governance of markets?," Public Choice, Springer, vol. 201(3), pages 533-553, December.
    4. Jason Chan & Shu He & Dandan Qiao & Andrew Whinston, 2024. "Shedding Light on the Dark: The Impact of Legal Enforcement on Darknet Transactions," Information Systems Research, INFORMS, vol. 35(1), pages 145-164, March.
    5. Jason Chan & Shu He & Dandan Qiao & Andrew B. Whinston, 2019. "Shedding Light on the Dark: The Impact of Legal Enforcement on Darknet Transactions," Working Papers 19-08, NET Institute.
    6. Abeer Elsayed Fayed, 2021. "Evaluation of the Impact of Using Electronic Marketing in Marketing Illegal Products by Applying to Marketing of Digital Drugs in the Kingdom of Saudi Arabia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 14(2), pages 1-66, July.
    7. Espinosa, Romain, 2019. "Scamming and the reputation of drug dealers on Darknet Markets," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    8. Francisco Javier García-Corral & José Antonio Cordero-García & Jaime de Pablo-Valenciano & Juan Uribe-Toril, 2022. "A bibliometric review of cryptocurrencies: how have they grown?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-31, December.
    9. Alberto Bracci & Jorn Boehnke & Abeer ElBahrawy & Nicola Perra & Alexander Teytelboym & Andrea Baronchelli, 2021. "Macroscopic properties of buyer-seller networks in online marketplaces," Papers 2112.09065, arXiv.org, revised Apr 2022.
    10. Dulani Jayasuriya Daluwathumullagamage & Alexandra Sims, 2020. "Blockchain-Enabled Corporate Governance and Regulation," IJFS, MDPI, vol. 8(2), pages 1-41, June.
    11. Zhicong Chen & Xiang Meng & Cheng-Jun Wang, 2023. "The dark web privacy dilemma: linguistic diversity, talkativeness, and user engagement on the cryptomarket forums," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-11, December.

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