The Asymmetry of Embeddedness: Illegal Trade Networks and Drug Purchasing Diversity on an Online Illegal Drug Market.

This article examines how distinct types of network embeddedness affect drug purchasing diversity and competition in online illegal drug markets, using data from 16,847 transactions among 7,205 actors on the darknet market Silk Road 3.1. It finds that repeated exchanges between the same buyer and vendor increase overall drug purchasing but reduce the likelihood of buyers purchasing new types of drugs, effectively "locking" buyers into recurrent trade relationships and fragmenting the market. Conversely, indirect network referrals—measured by four-cycle closures where buyers are referred to new vendors—encourage new drug-type purchases and increase the number of unique vendors buyers engage with, fostering a more integrated and competitive market. These asymmetric network effects highlight how different social mechanisms of trust and risk management shape illegal market structure, product differentiation, and competition, with implications for drug policy and enforcement strategies in online illicit markets.