The importance of supply and demand in the development of illicit markets for licit products

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Supply and demand dynamics are fundamental drivers in the development and functioning of illicit markets for otherwise licit products. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

Michala Kowalski; Ryan Courtney; Nicholas Taylor

doi:10.1111/add.70583

August 26, 2026Addiction

The importance of supply and demand in the development of illicit markets for licit products

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Key Points

To evaluate how foundational principles of supply and demand govern the formation and expansion of illicit markets for legally produced goods.
Conceptual and theoretical economic analysis exploring market formation without empirical dataset generation.
Supply shortages, taxation disparities, and access restrictions create structural price differentials that fuel unauthorized distribution channels.
Consumer demand persists when legitimate acquisition pathways are constrained, sustaining parallel illicit marketplaces for genuine products.

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Implication

Theoretical analysis uncovers supply and demand dynamics in illicit product markets, highlighting economic forces that drive diversion.

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Kowalski et al. (2026) studied this question.

synapsesocial.com/papers/6a91467bd15324a1df3aa231 https://doi.org/10.1111/add.70583

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The importance of supply and demand in the development of illicit markets for licit products

Key Points

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Implication

Abstract

Discussion

Cite This Study

The importance of supply and demand in the development of illicit markets for licit products

Key Points

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Implication

Abstract

Discussion

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