Signalling For Trust in Darknet Markets

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Competition is an important feature of criminal markets. Reuter’s (1983) description of drug markets and loan-sharking draws a picture of criminal markets filled with small, ephemeral and geographically constrained organizations that are unable to dominate or control their peers. Each organization is constantly fighting to keep its criminal market’s share. Levitt & Venkatesh (2000) paint a similar description of street gangs that are often involved in wars with each other, with no clear winner in sight. As criminal organizations have adopted the internet as a medium to communicate and conduct their illicit activities, the competition level in criminal markets has been maintained but takes on a different nature due to the anonymous and virtual nature of the internet. Online, criminal organizations involved in the trade of illicit products such as drugs can’t compete through turf war and violence; instead, they must compete for the customers’ attention and money.
This is perhaps best exemplified with the launch in 2011 of online drug dealing platforms where drug dealers can post ads about their drugs and customers can place orders, pay in virtual currencies and receive their drugs in stealth packaging through the regular mail. Such platforms create an open field where hundreds of drug dealers are competing for the same customers. Each have the same ‘storefront’ to advertise their products but do not use the same strategies. Some will participate actively in the community and take the time to chat with them in discussion forums. Others will invest in professional photo shots of their drugs and provide extensive descriptions of the drugs for sale as well as how to use them safely. Customers may feel at times like participants of a dating app: there are many interesting choices to choose from, but they can only interact with one choice at a time.
This paper aims to explain the circumstances under which successful transactions can occur on these online drug markets following trust bonding between a vendor and a buyer. To do so, a regression model predicting the number of sales of cocaine dealers online is presented and includes independent variables that take into account the past experience, the community integration and the self presentation of cocaine dealers. Our findings demonstrate that talk is cheap on online drug dealing platforms and that customers rely heavily on third-parties and hard to fake signs showcased by drug dealers. This paper contributes on the discussion of trust in criminal markets.

This content has been updated on 5 March 2018 at 14 h 56 min.