Talk:Monopsony

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monopsony-power

- Im changing the intro section to include a reference to "monopsony-power" being used to refer to situations of not only a single buyer, but where individual buyers face an upwardly sloping supply curve. I think this is important because when one talks of "monopoly power" it is taken for granted that one can mean a situation with dominance (but not single buyer), but too many people seem to think "monopsony power" refers only to a single buyer.

I don't think the analysis of why wages would be maximized under perfect competition was correct. IMO, there was unjustified emphasis on this assertion that, for reasons unclear, the supply of labor would be perfectly elastic in a competitive market, though not under a monopsony. But the labor supply curve is independent of what's happening on the demand side. What actually changed was that the prior monopsonist could no longer maintain his low wages because his employees would be poached by a competitor. Competition drives wages to equilibrium. --Rmalloy 04:41, 30 September 2006 (UTC)[reply]

Monopsony power – when it exists – can be measured, through the price-elasticity of the faced supply function. As far as I know, no such measures exist to justify the claims made in the article about monopsony in various firms and markets. Unless some is provided, such claims should perhaps be treated as arbitrary:Mario 28 June 2005 14:43 (UTC)

"Public" monopsony ?

Someone has added a bit which says: "Monosophonies of course occur in goods only purchased by the government, such as roads and certain weapons (thouigh the former may face competition between levels of government)". Mispelling "Monosophonies" a part, this is true for the "naked" definition, but not for the model. The latter refers in fact to a purchaser who is a profit maximiser. It is only within such model that monopsony leads to a well-defined and measurable allocation problem. Thus the added bit appears to be essentially misleading. I'll wait a few days and then, if nobody produces some counter-argument, I'll remove it. -- Mario 17:47, 1 August 2005 (UTC)[reply]

I came here looking for exactly this sort of information: what sorts of market problems occur when government is the monopsonist. --Error28 19:00, 19 March 2007 (UTC)[reply]

Examples?

I'd like to see some historical examples here, if possible.

What about Wal-mart?

For info on Wal-Mart as monopsonist, see Barry C. Lynn's article in the July 2006 Harper's

That's quite a stretch. In order o fit the definition, Sears, Target, Zellers, Kmart, and every store that sells good in the United States would have to go out of business. BTW Damn you Walmart for selling affordable goods to the population! We'll get you for that. JettaMann (talk) 02:48, 15 September 2008 (UTC)[reply]

Also need to include monopsonies in non-profit / government sectors. School districts are historical monopsonies for the labor market of teachers. However, some are losing their market power in the face of charter school competition. Welsch (2011 "Contemporary Economic Policy")

Examples Part II

Could we please have a graph of a competative labor market, so as to be able to compare it to the monopsony graph.

Ditto for having examples from product markets and not just labor markets. 129.10.244.54 02:43, 4 December 2006 (UTC)[reply]

Rephrasing?

Is it just me or does this article sound like an academic paper designed for economists? Would it be possible to water down the syntax so the average joe like myself can understand it?

Agreed. I thought I was an educated bloke until I met the term "upwardly-sloping supply curve" in the very first sentence of the overview. Jargon-laden econonomics and hair-splitting definition are fine for later sections, but the introductory portions need to become more encyclopedic. I'll see if I can at least clean up the introduction for general readers. SpaceToast (talk) 02:58, 4 January 2009 (UTC)[reply]

Examples III

Theory is all well and good, but how does this play out in terms of historical examples? Interesting ones outside the staid realms of modern-day mega-corporations would be wonderful. To what extent can the Dutch East India Company or British East India Company be considered to have been monopsonistic? LordAmeth 19:02, 5 June 2007 (UTC)[reply]

Is there a monopsonist penalty?

I was surprised to find no discussion of the possible penalty a monopsonist might suffer. The example I have in mind is that of NASA which has to buy launchers (rockets) from US companies. There are only two builders of large launchers at present, Boeing and Lockheed-Martin. Their prices are high compared with non-US suppliers, eg the Russian Proton launcher. To some extent NASA is unable to bargain for better prices because there are no other customers to set a market rate. The non-US launch companies don't seem to provide this 'reality check' on prices. NASA's monopsonist position is only approximately correct because the US military is the largest customer for these launchers, but as both are branches of the US government there is at root only one customer. Has this monopsonist penalty effect been discussed in the economics literature? 131.142.52.215 19:13, 4 December 2007 (UTC)Martin E[reply]

Explanation of Rising Marginal Cost of Employment

I am a beginner student of economics and it was not immediately obvious to me why a monopsonic employer would need to increase the wage rate of all employees to add a new worker. I looked this up elsewhere and determined that this can be more easily and clearly explained as follows:

It should be noticed that this marginal cost is higher than the wage w(L) paid to the new worker by the amount

(Formula omitted)

This is because the firm has to increase the wage paid to all the workers it already employs whenever it hires an extra worker. As it is the sole buyer of all labor in the industry, attracting new workers requires increasing the overall wage rate so that new laborers enter the industry.

Is this sensible? If so, should it be added to the explanation? —Preceding unsigned comment added by 71.172.243.190 (talk) 01:47, 13 October 2010 (UTC)[reply]

Is this a page on labor, or an economic term?

I came away from the page more confused than before going to it. Where is the explanation that gives a good overview without going into minute details? Why is most of the article focused on a single example (labor) using equations, graphs, and details meaningless to someone looking for a good overview of the term? (I'm sure there's probably flags that should be added to show that this article needs fixing, but I'm not a wikipedia junkie and don't know how to do that.) Contrast this page with Oligopoly http://en.wikipedia.org/wiki/Oligopoly — Preceding unsigned comment added by 173.228.6.77 (talk) 05:13, 26 May 2011 (UTC)[reply]