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Law enforcement and concentration in illicit drug markets

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  • Poret, Sylvaine
  • Tejedo, Cyril

Abstract

In this paper we endogenize the horizontal structure of illicit drug markets. The key assumption is that the trafficker's probability of detection depends on his/her market share. The author show that a stricter law enforcement policy encourages traffickers to permit competitors into the market. Increasing deterrence reduces the quantities supplied by each trafficker but also induces new entry, which cancels out the decrease in individual production at the aggregated level. Equilibrium total quantity and criminal profit are independent of the law enforcement level.
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  • Poret, Sylvaine & Tejedo, Cyril, 2006. "Law enforcement and concentration in illicit drug markets," European Journal of Political Economy, Elsevier, vol. 22(1), pages 99-114, March.
    • Handle: RePEc:eee:poleco:v:22:y:2006:i:1:p:99-114
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    2. Poret, Sylvaine, 2002. "Paradoxical effects of law enforcement policies: the case of the illicit drug market," International Review of Law and Economics, Elsevier, vol. 22(4), pages 465-493, December.
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    1. Sylvaine Poret, 2006. "L'impact des politiques répressives sur l'offre de drogues illicites. Une revue de la littérature théorique," Revue économique, Presses de Sciences-Po, vol. 57(5), pages 1065-1091.
    2. Leonardo Raffo López & José Luis Segura, 2018. "La ineficacia de las políticas de represión a la oferta de drogas: una explicación alternativa," Ensayos de Economía 16782, Universidad Nacional de Colombia Sede Medellín.
    3. Carlos Casacuberta & Mariana Gerstenblüth & Patricia Triunfo, 2012. "Aportes del análisis económico al estudio de las drogas," Documentos de Trabajo (working papers) 0112, Department of Economics - dECON.
    4. Slim, Sadri, 2009. "Du refus de vente au don: une explication de la formation du prix par l´affect [From rejection of exchange to gift: regard as an explanation of prices]," MPRA Paper 15317, University Library of Munich, Germany, revised 24 Apr 2009.
    5. Leonardo Raffo López & José Luis Segura, 2015. "Las redes del narcotráfico y sus interacciones: un modelo teórico," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 17(32), pages 183-212, January-J.
    6. Poret, Sylvaine, 2009. "An optimal anti-drug law enforcement policy," International Review of Law and Economics, Elsevier, vol. 29(3), pages 221-228, September.
    7. Naranjo, Alberto J., 2010. "Spillover effects of domestic law enforcement policies," International Review of Law and Economics, Elsevier, vol. 30(3), pages 265-275, September.
    8. Ken Yahagi & Susumu Cato, 2023. "Strategic crackdown on organized crime by local governments," Economics of Governance, Springer, vol. 24(2), pages 237-257, June.
    9. Mohamed Chawki, 2022. "The Dark Web and the future of illicit drug markets," Journal of Transportation Security, Springer, vol. 15(3), pages 173-191, December.
    10. Ken Yahagi, 2019. "Law enforcement with criminal organizations and endogenous collaboration," European Journal of Law and Economics, Springer, vol. 48(3), pages 351-363, December.
    11. Leonardo Raffo López, 2015. "Law enforcement and drug trafficking networks: a simple model," Documentos de Trabajo 13014, Universidad del Valle, CIDSE.
    12. Adam Jacobsson & Alberto Naranjo, 2009. "Counter-intuitive effects of domestic law enforcement policies in the United States," Economics of Governance, Springer, vol. 10(4), pages 323-343, November.
    13. Flores, Daniel, 2016. "Violence and law enforcement in markets for illegal goods," International Review of Law and Economics, Elsevier, vol. 48(C), pages 77-87.
    14. Iain W. Long, 2017. "The Storm Before the Calm? Adverse Effects of Tackling Organized Crime," Manchester School, University of Manchester, vol. 85(5), pages 541-576, September.
    15. Jefferson DP Bertolai & Luiz GDS Scorzafave, 2021. "Property rights’ emergence in illicit drug markets," Rationality and Society, , vol. 33(1), pages 52-105, February.
    16. Kyle W. O’Donnell, 2015. "The cultural and political economy of drug prohibition," Chapters, in: Laura E. Grube & Virgil Henry Storr (ed.), Culture and Economic Action, chapter 19, pages 418-435, Edward Elgar Publishing.
    17. Ken Yahagi, 2022. "Regulation on coexisting legal and illegal markets with quality differentiation," European Journal of Law and Economics, Springer, vol. 53(2), pages 235-259, April.

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