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Law enforcement and drug trafficking networks: a simple model

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  • Leonardo Raffo López

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Abstract

This article presents a theoretical model to explain the performance of illicit drug markets. The analytical framework is based on the oligopoly model of Poret and Téjedo (2006), but the latter is extended in a crucial respect: the influence of drug trafficking networks in the illicit drug markets is considered. The proposed model indicates that Poret and Téjedo were correct: the aggregate quantity of drugs sold is negatively affected by the intensity of the law enforcement policies applied and positively affected by the number of traffickers in the market. We also determined that the individual and aggregate sales in the market are positively affected by the network’s average density. Our model is useful for explaining the failure of the war against drugs to halt the reproduction and expansion of illegal activities at a global level during the three past decades.

Suggested Citation

  • Leonardo Raffo López, 2015. "Law enforcement and drug trafficking networks: a simple model," DOCUMENTOS DE TRABAJO-CIDSE 013014, UNIVERSIDAD DEL VALLE - CIDSE.
  • Handle: RePEc:col:000149:013014
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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. Ortíz Quevedo, Carlos Humberto & Salazar Juan David, 2014. "Brasil como horizonte: mayor ingreso y mayor crecimiento económico para Colombia," DOCUMENTOS DE TRABAJO-CIDSE 011033, UNIVERSIDAD DEL VALLE - CIDSE.
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    4. Poret, Sylvaine & Tejedo, Cyril, 2006. "Law enforcement and concentration in illicit drug markets," European Journal of Political Economy, Elsevier, vol. 22(1), pages 99-114, March.
    5. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    6. Boris Salazar, 2013. "¿Crisis después de la crisis? La macroeconomía financiera después de la crisis global," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 127-158, January-J.
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    10. Leonardo Raffo López, 2010. "Narcotráfico y conflicto: ¿por qué bajó el precio de la cocaína?," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 12(23), pages 229-258, July-Dece.
    11. Raffo, Leonardo, 2015. "La baja de largo plazo en los precios de las drogas duras: una explicación," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE, issue 83, pages 63-96, March.
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    More about this item

    Keywords

    drug trafficking; illegal markets; law enforcement; social networks; gametheory; oligopoly;

    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
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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