Market for illegal goods

One of the interesting experiences during early days in University of Chicago was going through Kevin Murphy and Gary Becker's paper in Micro class which very elegantly explains how and why prohibition in the supply side of drugs -- with the goal of reducing quantity creates exactly the right incentives for people like drug suppliers to risk jail to produce more drugs.  Such prohibition creates exactly the opposite results you would want.  Here's another finding (see this post) to the argument that potency of drugs have increased -- meaning innovation is implicitly incentivized to get more bag for the buck.