How to Disrupt a Market

Market design research in economics naturally focusses on how to improve market efficiency.

Our objective here is exactly the opposite - how to design interventions that make a market less efficient.

Our research is inspired by the growth of illicit markets online where reducing their efficiency may reduce societal harm.

Using a web-based experiment, we find that a partial disruption to delivery is an effective method to decrease market efficiency.

The decrease is borne by sellers who sell fewer goods and have lower earnings.

A consequence of a disruption to delivery, however, is an increase in market concentration because it facilitates the emergence of a dominant seller.

In contrast, we find that attacks on seller ratings are ineffective at reducing market efficiency.

This study paves the way for evidence-based, causally driven investigations to aid policies to disrupt cybercrime and other illicit markets.