Law enforcement and concentration in illicit drug markets

Mise en œuvre de la loi et concentration sur les marchés des drogues illicites

Sylvaine Poret and Cyril Téjédo
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Cyril Téjédo: UdeS - Université de Sherbrooke

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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.

Keywords: LAW ENFORCEMENT; ORGANIZED CRIME; OLIGOPOLY; ILLICIT DRUGS; CONCENTRATION (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (12)

Published in European Journal of Political Economy, 2006, 22 (1), pp.99-114. ⟨10.1016/j.ejpoleco.2005.06.006⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02656903

DOI: 10.1016/j.ejpoleco.2005.06.006

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