Economics in the Black Market

With everything becoming accessible online, it’s no surprise that drugs are now easily sold and bought
online. The dark web has rose in popularity over the last decade as it has become easier and easier for
people to remain anonymous.


The online drug market started off with The Silk Road, which was the first and and longest standing dark
web platform. Once that was finally shut down, dozens more were created to take its place. While these
platforms are all relatively short-lived, the turnover rate between platforms is so quick it’s as if nothing
was ever shut down.


When using an interface that’s known for secrecy and anonymity, the issues of trust and moral hazard
come up. How do you know that you’re not getting ripped off if you can’t rely on face to face interaction
and seeing the product before buying it? According to the LSE that doesn’t seem to be that big of a
problem. Only a small minority of drugs being sold receive bad reviews, which means the issue of ripping
people off doesn’t seem to be very prevalent. This is because, especially in black markets, reputation
means something. If a seller’s product gets a bad review, they won’t sell anymore and will be essentially
pushed out of the black market.


Black market or legitimate market, the economics behind them are the same. As long as there is demand,
there will be suppliers that figure out a way to meet the demand. The suppliers are incentivized to put out
a good product to uphold their reputation and gain more customers in the future.

The dark web and drug economy are constantly changing, but as long as people want drugs, these
platforms will keep popping up, taking our country’s war on drugs into the cyber domain.

Sources:
https://www.weforum.org/agenda/2017/12/how-to-civilize-the-dark-web-economy-bef5311f-704d-467b-
b005-6aa80a40f46b/
https://blogs.lse.ac.uk/businessreview/2017/11/06/dark-web-the-economics-of-online-drugs-markets/
https://theoutline.com/post/1136/dark-web-mapping-project?zd=1&zi=lukl7au3

Comments

  1. AnonymousApril 1, 2019 at 8:36 AM

    This was a really interesting article and I learned a lot about online drug markets. Looking into the topic further, what I realized is that the success of each platform goes far beyond simply the quality of drugs. One of the main concerns is always whether or not individuals will be scammed and most of the better platforms have reputable sellers who ensure that consumers receive what they actually pay for. Furthermore, the web design of each platform is very important, as being able to easily navigate the websites or having appealing visuals fuels the reputation of the platform. It's interesting how the drug market has been able to expand so far, and how at the end of the day, the drugs aren't all that matters to consumers.

    Source : https://silkroaddrugs.org/buying-drugs-online/

    ReplyDelete

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