Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium

Experience from the last decade in Colombia and Mexico suggests that violence increases when governments achieve their objective of beheading and fragmenting drug trafficking organizations (DTOs). In this paper I provide a theoretical framework to understand this behavior. Drawing elements from indu...

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Autores:
Castillo Hernández, Juan Camilo
Tipo de recurso:
Work document
Fecha de publicación:
2013
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
eng
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/8455
Acceso en línea:
http://hdl.handle.net/1992/8455
Palabra clave:
Illegal drug markets
Supply reduction
Violence
War on drugs
Control de drogas y narcóticos
Narcotráfico
Violencia
D74, K42
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
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dc.title.none.fl_str_mv Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
dc.title.alternative.none.fl_str_mv ¿La política de drogas debe atacar a los líderes de carteles? : el rompimiento de un equilibrio pacífico
title Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
spellingShingle Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
Illegal drug markets
Supply reduction
Violence
War on drugs
Control de drogas y narcóticos
Narcotráfico
Violencia
D74, K42
title_short Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
title_full Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
title_fullStr Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
title_full_unstemmed Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
title_sort Should drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium
dc.creator.fl_str_mv Castillo Hernández, Juan Camilo
dc.contributor.author.none.fl_str_mv Castillo Hernández, Juan Camilo
dc.subject.keyword.none.fl_str_mv Illegal drug markets
Supply reduction
Violence
War on drugs
topic Illegal drug markets
Supply reduction
Violence
War on drugs
Control de drogas y narcóticos
Narcotráfico
Violencia
D74, K42
dc.subject.armarc.none.fl_str_mv Control de drogas y narcóticos
Narcotráfico
Violencia
dc.subject.jel.none.fl_str_mv D74, K42
description Experience from the last decade in Colombia and Mexico suggests that violence increases when governments achieve their objective of beheading and fragmenting drug trafficking organizations (DTOs). In this paper I provide a theoretical framework to understand this behavior. Drawing elements from industrial organization, I model DTOs as firms that collude by not attacking each other in order to increase their profits. DTOs always collude when they interact repeatedly; thus, previous analyses focusing on a static Nash equilibrium miss an important part of the dynamics between DTOs. I show that a peaceful equilibrium arises if there are only a few DTOs that care enough about the future. Policies resulting either in a larger number of DTOs or in more impatient leaders increase violence between DTOs without reducing supply. On the other hand, policies that reduce the productivity of DTOs, without directly attacking their leaders and fragmenting them, are more desirable since they can curb supply, although this comes at the cost of increased violence if the elasticity of demand is below a certain threshold. I calculate this threshold, which is a refinement of the value suggested by Becker et al. (2006) for consumer markets.
publishDate 2013
dc.date.issued.none.fl_str_mv 2013
dc.date.accessioned.none.fl_str_mv 2018-09-27T16:53:21Z
dc.date.available.none.fl_str_mv 2018-09-27T16:53:21Z
dc.type.spa.fl_str_mv Documento de trabajo
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dc.identifier.eissn.none.fl_str_mv 1657-7191
dc.identifier.doi.none.fl_str_mv 10.57784/1992/8455
dc.identifier.instname.spa.fl_str_mv instname:Universidad de los Andes
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url http://hdl.handle.net/1992/8455
dc.language.iso.none.fl_str_mv eng
language eng
dc.relation.ispartofseries.none.fl_str_mv Documentos CEDE No. 41 Agosto de 2013
dc.relation.repec.SPA.fl_str_mv https://ideas.repec.org/p/col/000089/011471.html
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dc.format.extent.none.fl_str_mv 50 páginas
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dc.publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
institution Universidad de los Andes
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spelling Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Castillo Hernández, Juan Camilo2878af92-d786-4428-971b-9dfb625cfd8b5002018-09-27T16:53:21Z2018-09-27T16:53:21Z20131657-5334http://hdl.handle.net/1992/84551657-719110.57784/1992/8455instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/Experience from the last decade in Colombia and Mexico suggests that violence increases when governments achieve their objective of beheading and fragmenting drug trafficking organizations (DTOs). In this paper I provide a theoretical framework to understand this behavior. Drawing elements from industrial organization, I model DTOs as firms that collude by not attacking each other in order to increase their profits. DTOs always collude when they interact repeatedly; thus, previous analyses focusing on a static Nash equilibrium miss an important part of the dynamics between DTOs. I show that a peaceful equilibrium arises if there are only a few DTOs that care enough about the future. Policies resulting either in a larger number of DTOs or in more impatient leaders increase violence between DTOs without reducing supply. On the other hand, policies that reduce the productivity of DTOs, without directly attacking their leaders and fragmenting them, are more desirable since they can curb supply, although this comes at the cost of increased violence if the elasticity of demand is below a certain threshold. I calculate this threshold, which is a refinement of the value suggested by Becker et al. (2006) for consumer markets.La experiencia de la última década en Colombia y México sugiere que la violencia aumenta cuando los gobiernos logran su objetivo de descabezar y fragmentar las organizaciones narcotraficantes (ON). En este artículo se propone un marco teórico para entender este comportamiento. A partir de algunos elementos de la organización industrial, se modelan las ON como firmas que coluden para no atacarse entre sí y obtener mayores beneficios. Las ON siempre coluden cuando interactúan de forma repetida. Esto quiere decir que los análisis previos que se enfocan en un equilibrio de Nash estático no reflejan una parte importante de las dinámicas entre las ON. Un equilibrio pacífico surge si hay un número pequeño de ON suficientemente interesadas en el futuro. Las políticas que resulten ya sea en un mayor número de ON o en que sus líderes sean más impacientes incrementan la violencia entre ellas sin reducir la oferta. Por otro lado, las políticas que reduzcan la productividad de las ON, sin atacar a sus líderes directamente y fragmentarlas, son más deseables ya que pueden reducir la demanda. Esto, sin embargo, tiene como costo un aumento en la violencia si la elasticidad de la demanda está por debajo de cierto umbral. Se presenta el cálculo de este umbral, el cual es un refinamiento del valor propuesto por Becker et al. (2006) para mercados de consumidores.50 páginasapplication/pdfengUniversidad de los Andes, Facultad de Economía, CEDEDocumentos CEDE No. 41 Agosto de 2013https://ideas.repec.org/p/col/000089/011471.htmlShould drug policy be aimed at cartel leaders? : breaking down a peaceful equilibrium¿La política de drogas debe atacar a los líderes de carteles? : el rompimiento de un equilibrio pacíficoDocumento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPIllegal drug marketsSupply reductionViolenceWar on drugsControl de drogas y narcóticosNarcotráficoViolenciaD74, K42Facultad de EconomíaPublicationTEXTdcede2013-41.pdf.txtdcede2013-41.pdf.txtExtracted texttext/plain168841https://repositorio.uniandes.edu.co/bitstreams/7b2d5cb5-2cb2-4c55-bc08-cb63cc50065d/download01435e4a0cd7a14fd13293cb63f820a5MD54ORIGINALdcede2013-41.pdfdcede2013-41.pdfapplication/pdf1250338https://repositorio.uniandes.edu.co/bitstreams/8e406289-3450-47fb-99ac-a2c0d1b3489f/download20a996ee3355f79cb1731892514f4ec7MD51THUMBNAILdcede2013-41.pdf.jpgdcede2013-41.pdf.jpgIM Thumbnailimage/jpeg30388https://repositorio.uniandes.edu.co/bitstreams/73a4b57d-bbf2-4abb-916b-0260d7ca5fa9/download0825c6929ac8828a22c4a26505300fc4MD551992/8455oai:repositorio.uniandes.edu.co:1992/84552024-06-04 15:12:44.15http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co