Eventi del

21 2019 12:00 - 13:30
Meeting room E4-SR01, Via Roentgen, 1, 4th floor

From Darknets to Light

PRASAD VANA, Dartmouth College

Abstract

A large majority of e-commerce happens on the “Surface Web", which consists of all the websites that can be accessed through search engines. However, there has recently been a rapid growth in the “Dark Web", consisting of websites which cannot be indexed by search engines. The Dark Web offers a high degree of anonymity and security to its users and has attracted illicit activity. Online marketplaces similar to Amazon Marketplace and Etsy on the Surface Web have also evolved on the Dark Web and are commonly known as "Darknet markets". These markets have attracted sellers and buyers of illegal products such as drugs, weapons, and counterfeits. Law enforcement agencies are interested in curbing the rise of these markets. In this research, we focus on a bust operation conducted by the FBI and Europol in November 2014 that shut down Silk Road 2.0, one of the biggest Darknet markets at the time. Using the bust as an exogenous shock, we investigate the causal effect of the bust on Evolution and Agora, the next two biggest Darknet markets that were not subject to the bust. We find that the bust had positive marketing consequences for the buyers and the administrators of Evolution and Agora. Specifically, the prices reduced, and the number of transactions per vendor increased following the bust. Our results also indicate that these benefits are not simply a product of the forces of supply and demand but that they occur despite them. Our findings demonstrate that there could be surprising and unintended consequences to such busts and recommend law enforcement agencies consider them into their enforcement strategies.

 

Key words: Two-sided markets; ecommerce; Dark Web