Monopsony power and the existence of natural monopoly in energy utilities

The justification for price and entry regulation of firms hinges on whether the firms are natural monopolies, and empirical tests have been used to determine the natural monopoly status of public utilities. However, these tests are biased if the utilities possess monopsony power - a likely case. The bias is against finding natural monopoly status, which can lead to improper policies. An alternative method of testing is proposed which eliminates the bias.     

零售商垄断势力、通道费与经济规制

拥有买方垄断势力的零售商对生产商的纵向约束是近年来西方国家反垄断司法实践所关注的焦点之一,然而现有的文献对于零售商拥有买方垄断势力的情形很少涉及.现实中,随着零售业的变革,下游零售商很可能在产业链中成为主导企业,从而导致零售商要求生产商交纳"通道费"的现象十分普遍.本文基于SCP分析框架,对零售商垄断势力下的通道费及其福利效应进行分析,并对相应的政府规制提出建议.     

Monopsonistic discrimination, worker turnover, and the gender wage gap

Motivated by models of worker flows, we argue in this paper that monopsonistic discrimination may be a substantial factor behind the overall gender wage gap. Using matched employer–employee data from Norway, we estimate establishment-specific wage premiums separately for men and women, conditioning on fixed individual effects. Regressions of worker turnover on the wage premium identify less wage elastic labour supply facing each establishment of women than that of men. Workforce gender composition is strongly related to employers' wage policies. The results suggest that 70–90% of the gender wage gap for low-educated workers may be attributed to differences in labour market frictions between men and women, while the similar figures for high-educated workers ranges from 20 to 70%.     

The Death of a Market: Standard Oil and the Demise of 19th Century Crude Oil Exchanges

Review of Industrial Organization - From the mid-1870s through 1895, a commoditiesmarket in oil existed. Although its organizationwas primitive, it offered the varieties of commoditycontracts...     

Local monopsony and free riders

In an industry with upstream economies of scale in the distribution of differentiated products to retailers which have monopoly power within separate local market areas, the retailers have an incentive to exert monopsony power due to the divergence between average and marginal costs in the distribution of those inputs. The retailers increase their ability to exert monopsony power by forming coalitions (that is, chains) across local markets. Sufficiently large retail chains may force input price below the seller's average cost, thus ‘free riding’ on the level of product variety supported by other retailers. Vertical integration, cartels, or other cooperative behavior, however, can be means to control the level of product variety, and may increase both industry profits and economic welfare. Policy applications to the cable television, motion picture, and pharmaceutical industries are discussed.     

Are you hiring Johnny Football or Johnny Doe? Uncertain labour quality and the measurement of monopsony in college football

I assess monopsony in the college football labour market as it relates to both typical and elite performers, while also accounting for the uncertain performance quality of prospective players who are in this labour market. Existing studies suggest that the marginal revenue product (MRP) of elite collegiate players later drafted into the National Football League (NFL), significantly exceeds their compensation. These comparisons overstate monopsony rents because schools don’t know ex ante which prospects will become these elite performers. Using financial data spanning 2004–2011 from 114 major schools, I estimate the MRP of players sorted into three ex post quality tiers, and find that while eventual NFL draftees generate revenue that significantly exceeds their compensation, a majority of scholarship players do not. Then, using Rivals.com talent ratings of 6,604 prospective players recruited from 2002–2008, I estimate the probability that prospects will reach each ex post quality tier given their ex ante ratings. MRP estimates are adjusted by these conditional probability estimates to reflect the expected MRP of prospects, which allows more appropriate assessment of monopsony rents. I find that schools possess substantially less monopsony power than unadjusted MRP estimates suggest.     

Monopsony and competition: The impact of rival leagues on player salaries during the early days of baseball

During the early days of professional baseball, the dominant major leagues imposed a “reserve clause” designed to limit player wages by restricting competition for labor. Entry into the market by rival leagues challenged the incumbent monopsony cartel's ability to restrict compensation. Using a sample of player salaries from the first 40 years of the reserve clause (1880–1919), this study examines the impact of inter-league competition on player wages. This study finds a positive salary effect associated with rival league entry that is consistent with monopsony wage suppression, but the effect is stronger during the 20th century than the 19th century. Changes in levels of market saturation and minor-league competition may explain differences in the effects between the two eras.     

Training opportunities in monopsonistic labour markets

This paper studies the empirical relationship between the extent of monopsonistic power observed in occupational labour markets and the training opportunities available to workers in those markets; using data from the American National Longitudinal Survey of Youth of 1979. The results reveal a positive and significant association between monopsony power and training availability. The estimated association is found to be stronger for individuals with a college degree, with longer tenure in their jobs, and higher wages. These results are consistent across several econometric specifications that control for time, occupation, and individual fixed effects.     

Monopsonistic competition,low-wage labour markets,and minimum wages – An empirical analysis

This article investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer–employee data set which allows to control for observed heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.