Skip to Main content Skip to Navigation
Journal articles

Scamming and the Reputation of Drug Dealers on Darknet Markets

Abstract : In this paper I investigate the role of e-reputation mechanisms on illegal platforms that specialize in drug sales. I ask whether online reputation systems can limit the risk of scamming (i.e. fraud) by dishonest sellers, and thus prevent Akerlof-like market destruction. I do so by analyzing all published offers on the second-largest platform operating on March 18th 2017 (Hansa). Three types of drugs show relatively low scamming risks, with the average probability that a random seller effectively send the ordered good of over 83%. The recent shutdowns of the two leading platforms are likely to increase this probability by 2.7 to 9.7%. Endogeneity may either lead us to overestimate the effect of e-reputation mechanisms (e.g., unobserved heterogeneity in sellers) or underestimate it (e.g., better-functioning markets may attract more scammers).
Document type :
Journal articles
Complete list of metadata

Cited literature [22 references]  Display  Hide  Download

https://halshs.archives-ouvertes.fr/halshs-02180182
Contributor : Romain Espinosa <>
Submitted on : Thursday, July 11, 2019 - 12:11:52 PM
Last modification on : Wednesday, July 24, 2019 - 1:19:10 AM

File

DNM Reputation.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : halshs-02180182, version 1

Citation

Romain Espinosa. Scamming and the Reputation of Drug Dealers on Darknet Markets. International Journal of Industrial Organization, Elsevier, In press. ⟨halshs-02180182v1⟩

Share

Metrics

Record views

29

Files downloads

55