Gang wars, gang employment and drug prices

Aloys Prinz () and Thomas Ehrmann ()
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Aloys Prinz: University of Muenster
Thomas Ehrmann: University of Muenster

Journal of Bioeconomics, 2019, vol. 21, issue 1, No 3, 37-46

Abstract: Abstract The distribution of illegal drugs on local markets is closely related to the phenomenon of gang wars. In a simple model of a local monopoly gang it is studied how the simultaneous decision on the number of low-rank gang members and the local retail market drug prices may affect gang wars. The drug distribution technology is described by a concave production function that contains low-rank gang members as a production factor. One key factor is added to a simple model of such a monopoly retail market for drugs: there is a gang membership benefit for low-rank members that makes these members cheap workers. This feature implies that increases of the membership value decrease drug prices by expanding the number of low-rank members.

Keywords: Gang wars; Illegal drugs; Local monopoly; Gang reputation; Non-pecuniary membership value (search for similar items in EconPapers)
JEL-codes: D21 D42 J46 L11 M21 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10818-018-09281-x

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