Three key features of the retail trade for illicit drugs are documented: moral hazard, repeated interactions and price dispersion. An interpretation of this evidence based on search and informational frictions is presented. Various policy implications of the suggested interpretation are discussed.

hiring by using a referral.

information value of referrals.

We build a framework to understand the effects of regulatory interventions in credit markets, such as caps on interest rates and higher compliance costs for lenders. We focus on the credit card market, in which we observe U.S. consumers borrowing at high and very dispersed interest rates,...