Reputation in the Internet Black Market : An Empirical and Theoretical Analysis of the Deep Web

We provide an extensive analysis of the Deep Web, using data from the Silk Road which is an encrypted online marketplace that employs crypto currency and functions over the Tor network. Utilizing a modeling technique that is suggested by trade auction theory where parties, buyers and sellers have transparent reputations. We investigate how this model functions if only one party has an observable reputation and how the seller's reputation plays into prices of goods and services. Our data set is parsed from the Silk Road website over a 9 month time period. We demonstrate that the online marketplace has been operating without governmental taxation or regulation and is functioning steadily. We discuss the robustness of spontaneous order with respect to the Deep Web as an emergent marketplace