Welfare effects of forming a criminal organization

This paper develops a simple model to examine the economic consequences of two different criminal market structures in the private protection and extortion industry: (1) horizontal (decentralized) governance and market structure and (2) hierarchical (centralized) governance and market structure with a criminal organization. Forming a criminal organization produces positive or negative effects on its members and social efficiency. These results depend on the potential competitiveness among criminals and the ability of a criminal organization’s boss to target more valuable extortion victims.     

Regulation on coexisting legal and illegal markets with quality differentiation

European Journal of Law and Economics - This paper considers coexisting legal and illegal markets for goods with undesirable consumption externalities, such as marijuana markets. This paper...