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arXiv · 2607.24389

How to Disrupt a Market

Edoardo Gallo·Rebecca Heath·Jonathan Lusthaus·Federico Varese
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Abstract

Market design research in economics naturally focusses on how to improve market efficiency. Our objective here is exactly the opposite - how to design interventions that make a market less efficient. Our research is inspired by the growth of illicit markets online where reducing their efficiency may reduce societal harm. Using a web-based experiment, we find that a partial disruption to delivery is an effective method to decrease market efficiency. The decrease is borne by sellers who sell fewer goods and have lower earnings. A consequence of a disruption to delivery, however, is an increase in market concentration because it facilitates the emergence of a dominant seller. In contrast, we find that attacks on seller ratings are ineffective at reducing market efficiency. This study paves the way for evidence-based, causally driven investigations to aid policies to disrupt cybercrime and other illicit markets.

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Edoardo Gallo, Rebecca Heath, Jonathan Lusthaus, Federico Varese. 2026-07-27. How to Disrupt a Market. https://arxiv.org/abs/2607.24389

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