Welfare effects of forming a criminal organization

Ken Yahagi*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


This paper develops a simple model to examine the economic consequences of two different criminal market structures in the private protection and extortion industry: (1) horizontal (decentralized) governance and market structure and (2) hierarchical (centralized) governance and market structure with a criminal organization. Forming a criminal organization produces positive or negative effects on its members and social efficiency. These results depend on the potential competitiveness among criminals and the ability of a criminal organization’s boss to target more valuable extortion victims.

Original languageEnglish
Pages (from-to)359-375
Number of pages17
JournalEuropean Journal of Law and Economics
Issue number3
Publication statusPublished - 2018 Dec 1


  • Conflict
  • Crime
  • Extortion
  • Organized crime
  • Rent-seeking

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Law


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