TY  - JOUR
PY  - 2009//
TI  - A Search-Theoretic Model of the Retail Market for Illicit Drugs
JO  - NBER working papers series
A1  - Galenianos, Manolis
A1  - Pacula, Rosalie Liccardo
A1  - Persico, Nicola
SP  - w14980
EP  - w14980
VL  - 2009
IS  - online
N2  - A search-theoretic model of the retail market for illegal drugs is developed. Trade occurs in bilateral, potentially long-lived matches between sellers and buyers. Buyers incur search costs when experimenting with a new seller. Moral hazard is present because buyers learn purity only after a trade is made. The model produces testable implications regarding the distribution of purity offered in equilibrium, and the duration of the relationships between buyers and sellers. These predictions are consistent with available data. The effectiveness of different enforcement strategies is evaluated, including some novel ones which leverage the moral hazard present in the market.<p /> 
LA  - 
SN  - 0898-2937
UR  - http://dx.doi.org/
ID  - ref1
ER  -