Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 22, 2022 erstellt
Beschreibung:
Governments and law enforcement agents have long been troubled by the rapid development of online illegal transaction platforms and influential bell cows amidst them. In this paper, we will causally examine the effects of introducing a search-cost-reduction technology on darknet transactions to provide insights for police enforcement. When search cost is reduced on legal markets, either a long tail or an intensified concentration can arise. How to search technologies might influence darknet market structure is yet blank in previous literature, which adds significant challenges for police targets during enforcement. Our paper is motivated to answer this question. Relying on a Difference-in-Differences model, we first show that darknet transactions see a significant uplift when a search intermediary is deployed. We further conducted various analyses to unveil the darknet market structure change and the potential underlying mechanisms. Bell-cow vendors are found to reap more benefits by experiencing a larger-scale transaction increase relative to small vendors. Such an increased concentration structure change can be explained by the trustworthiness prioritized by consumers in the illicit environment, as evidenced in our analyses regarding high-risk and obscure drugs. There are no significant changes in terms of drug prices. We believe that these findings add novel insights into the search cost theory to understand how search technologies influence consumers’ choices and consequent market structure in the darknet. Practically, we inspire policy design for police enforcement on darknet transactions, especially regarding the selective targeting of bell cows in response to technique upgrades