Terry always puts red diesel in his tank,
Rather get paid in cash or kind.
Keeps his money in his pocket,
And never in the bank.
Terry keeps his records in his mind.
(from) Red Diesel Show of Hands
Like the black market the grey market (or grey economy) represents a portion of a nation's economic activity with something illegal about it - not as explicit as the illegality of the black market (and therefore "grey" by contrast), but still less than legitimate.
In general grey market goods are fundamentally legal, but some aspect of their sale is not - common examples would be failure to pay relevant taxes, failure to follow licencing requirements or trading in breach of a monopoly, price-fixing agreement or general guild privilege. Typically, the more highly regulated the economy, the larger the grey and black sectors will become, supplying routes around, through and under the red tape and prohibition. Amongst elites, very similar measures, designed to go "over" the barriers will also be in place, but these are far less likely to be subject to criminal sanctions.
Again, this tends not to take place from a specific marketplace - but is more likely to occur pretty much anywhere instead. Which can be an offence in itself if laws against forestalling and the like are in place.
Game and Story Use
- This is actually quite common - most people who aren't lawful stupid (and probably many who are) will have done it at some point in real life (often without thinking about it too much). Doing so in an RPG campaign should be just as trivial.
- Locating grey market vendors probably requires appropriate local knowledge or streetwisdom skills from a PC. This sort of transaction may also be the result of successful haggling rolls ("certainly we offer a discount for cash sir").
- As noted, payment may be an issue - whilst not as hazardous as the black economy, the grey market usually frowns on traceable payments. Cash is king, but there are plenty of barter based and alternative currency trades going on "off grid" in most areas as well - the majority of which will qualify for the grey market. Buying into one of these subeconomies relies on having tradable goods or services.
- That said, it's also an offence that authorities with nothing better to do - or a vendetta to pursue - can find most people guilty of.
- Despite the popularity of grey-market trading, organised crime will often be involved somewhere, which can add excitement to an otherwise mundane transaction.