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Turf and Illegal Drug Market Competition between Gangs

Author

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  • Naranjo Alberto J.

    (Department of Economics, Universidad de La Sabana, Puente del Comun, Km 7, Chia 107 32, Colombia)

Abstract

Street-level illegal drug markets generate much of the violence and intimidation that local communities face nowadays. These markets are mainly driven by territorial gangs who finance their activities through the sale of drugs. Understanding how the existence of both turf and drug market competition may have unintended consequences of law enforcement policies on violence is the main contribution of the paper. We propose a two-stage game-theoretical model where two profit maximizing gangs compete in prices and invest in guns. We find that policies such as traditional or community policing can have different and unexpected effects on the level of violence.

Suggested Citation

  • Naranjo Alberto J., 2015. "Turf and Illegal Drug Market Competition between Gangs," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1507-1548, October.
    • Handle: RePEc:bpj:bejeap:v:15:y:2015:i:4:p:1507-1548:n:3
    DOI: 10.1515/bejeap-2013-0161
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    References listed on IDEAS

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    1. Robert Burrus, 1999. "Do efforts to reduce the supply of illicit drugs increase turf war violence? a theoretical analysis," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(3), pages 226-234, September.
    2. Caulkins Jonathan P & Reuter Peter & Taylor Lowell J, 2006. "Can Supply Restrictions Lower Price? Violence, Drug Dealing and Positional Advantage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-20, January.
    3. Greg Shaffer & Z. John Zhang, 2000. "Pay to Switch or Pay to Stay: Preference‐Based Price Discrimination in Markets with Switching Costs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 397-424, June.
    4. Sylvaine Poret, 2001. "The Illicit Drug Market : Paradoxical Effects of Law Enforcement Policies," Working Papers 2001-02, Center for Research in Economics and Statistics.
    5. Adam Jacobsson & Alberto Naranjo, 2009. "Counter-intuitive effects of domestic law enforcement policies in the United States," Economics of Governance, Springer, vol. 10(4), pages 323-343, November.
    6. Fox, Kathleen A. & Lane, Jodi & Akers, Ronald L., 2010. "Do perceptions of neighborhood disorganization predict crime or victimization? An examination of gang member versus non-gang member jail inmates," Journal of Criminal Justice, Elsevier, vol. 38(4), pages 720-729, July.
    7. Naranjo, Alberto J., 2010. "Spillover effects of domestic law enforcement policies," International Review of Law and Economics, Elsevier, vol. 30(3), pages 265-275, September.
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