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Cannabis Prices on the Dark Web

Author

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  • Jakub Cerveny

    (Medical University Vienna)

  • Jan van Ours

    (Erasmus University Rotterdam)

Abstract

This paper examines prices of cannabis sold over the anonymous internet marketplace AlphaBay. We analyze cannabis prices of 500 listings from about 140 sellers, originating from 18 countries. We find that both listing characteristics and country characteristics matter. Cannabis prices are lower if sold in larger quantities, so there is a clear quantity discount. Cannabis prices increase with perceived quality. Cannabis prices are also higher when the seller is from a country with a higher GDP per capita or higher electricity prices. The internet based cannabis market seems to be characterized by monopolistic competition where many sellers offer differentiated products with quality variation causing a dispersion of cannabis prices and sellers have some control over the cannabis prices.

Suggested Citation

  • Jakub Cerveny & Jan van Ours, 2019. "Cannabis Prices on the Dark Web," Tinbergen Institute Discussion Papers 19-059/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20190059
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    Cited by:

    1. Manuel Sánchez-Pérez & María Belén Marín-Carrillo & María Dolores Illescas-Manzano & Zohair Souilim, 2023. "Understanding the illegal drug supply chain structure: a value chain analysis of the supply of hashish to Europe," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.

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    More about this item

    Keywords

    Cannabis prices; Dark Web;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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