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Modeling the Domestic Distribution Network for Illicit Drugs

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  • Jonathan P. Caulkins

    (Carnegie Mellon University, Heinz School of Public Policy and Management, Pittsburgh, Pennsylvania 15213)

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    Abstract

    This paper presents a simple economic model of a drug dealer's decision about how many customers to supply. The model relates the number of customers (i.e., the branching factor of the distribution network) to a quantity discount factor describing the extent to which prices are marked up from one distribution level to the next and the ratio of selling costs to product costs. Solving the model allows one to infer characteristics of the domestic distribution network from more readily observable characteristics of the markets and, thereby, to gain insight into how drug control interventions might work.

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    File URL: http://dx.doi.org/10.1287/mnsc.43.10.1364
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 43 (1997)
    Issue (Month): 10 (October)
    Pages: 1364-1371

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    Handle: RePEc:inm:ormnsc:v:43:y:1997:i:10:p:1364-1371

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    Related research

    Keywords: drug policy; criminal justice; distribution; networks;

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    Cited by:
    1. Caulkins, Jonathan P. & Hao, Haijing, 2008. "Modelling drug market supply disruptions: Where do all the drugs not go?," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 251-270.
    2. Jeremy Arkes & Rosalie Liccardo Pacula & Susan M. Paddock & Jonathan P. Caulkins & Peter Reuter, 2008. "Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets," NBER Working Papers 14224, National Bureau of Economic Research, Inc.
    3. Pacula Rosalie Liccardo & Kilmer Beau & Grossman Michael & Chaloupka Frank J, 2010. "Risks and Prices: The Role of User Sanctions in Marijuana Markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, February.
    4. Sylvaine PORET, 2005. "Structure verticale d’un réseau de distribution de drogues illicites et politique répressive optimale," Discussion Papers (REL - Recherches Economiques de Louvain) 2005043, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Sylvaine Poret, 2006. "L'impact des politiques répressives sur l'offre de drogues illicites. Une revue de la littérature théorique," Revue économique, Presses de Sciences-Po, vol. 57(5), pages 1065-1091.

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