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Cannabis Prices on the Dark Web

Jakub Cerveny and Jan van Ours
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Jakub Cerveny: Medical University Vienna
Jan van Ours: Erasmus University Rotterdam

No 19-059/V, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper examines prices of cannabis sold over the anonymous internet marketplace AlphaBay. We analyze cannabis prices of 500 listings from about 140 sellers, originating from 18 countries. We find that both listing characteristics and country characteristics matter. Cannabis prices are lower if sold in larger quantities, so there is a clear quantity discount. Cannabis prices increase with perceived quality. Cannabis prices are also higher when the seller is from a country with a higher GDP per capita or higher electricity prices. The internet based cannabis market seems to be characterized by monopolistic competition where many sellers offer differentiated products with quality variation causing a dispersion of cannabis prices and sellers have some control over the cannabis prices.

Keywords: Cannabis prices; Dark Web (search for similar items in EconPapers)
JEL-codes: K42 D43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-pay
Date: 2019-08-19
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20190059

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