Anonymous Ratings, Anonymous Sellers: The Price of Reputation in the Online Marijuana Market

• In Event: Drug Markets in an Evolving Legal and Social Context

Abstract

The dark web is a prime location for the buying and selling of illegal goods and services due to its anonymous browsing and payment methods, like Bitcoin. This study focuses on the sale of marijuana from US-based sellers from the online marketplace, Agora, which was the most popular online market following the FBI takedown of the Silk Road. Literature in licit marketplaces suggest that seller ratings influence the prices they charge (Thompson & Haynes, 2017). In contrast, literature is mixed about whether such relationships exist in illicit marketplaces (Diekmann et al., 2014). To examine the relationship between seller ratings and prices in illicit marketplaces, this paper will draw on the theories of embeddedness, or interconnectedness and signaling. Together, these theories argue that a seller’s rating influences their prices since these ratings are seen as a marker of trust and reputation to the buyer. I will examine the association between vendor ratings and prices of marijuana on the Agora marketplace. Using a sample of 1,349 sales from 2014 to 2015, I estimate ordinary least squares regression models. Results will shed light on how marijuana vendors use pricing to navigate the anonymity of illicit online marketplaces.

Author

• Ella Taylor, Pennsylvania State University