NCJ Number
115125
Date Published
1988
Length
61 pages
Annotation
The model developed in this study analyzes the evolution of the drug smugglers' market.
Abstract
The analysis considers several ways in which active and potential smugglers choose their activity levels. In the competitive model, active smugglers take the future trajectory of prices as given and choose the quantity that equates current price and adjusted marginal cost. In the noncooperative model, active smugglers take the quantity decisions of others as given and equate adjusted marginal cost and current residual marginal revenue. In the cooperative model, smugglers act together to maximize collective profit. Several entry conditions are also considered. Law enforcement is also modeled in several ways. The analysis first examines the optimizing behavior of individual smugglers and then considers the equilibrium corresponding to a given set of active smugglers, followed by a study of the pattern of entry and exit that determines which smugglers are active at each stage. The model distinguishes among different types of law enforcement activity and the consequent impact of each activity on the cost of smuggling and consuming drugs. 13 figures, 14 tables, 6 references. (Author summary modified)