m] in Figure 2 show the equilibrium output and price in a monopsonistic
viatical settlement market.
Indeed, total employment must fall in the model if each monopsonistic
firm in an industry earns zero profits before a minimum wage is imposed.
In essence, the one segment where a positive employment impact is statistically significant (state-owned enterprises in the east) is the segment where monopsonistic
behavior is more likely to prevail, potentially explaining the unusual positive and significant impact on employment.
Using data on average salaries in Kentucky for the 1989 1990 school year and a variety of specifications, Borland and Howsen (1992, 1993, 1996) estimate that the difference in average salaries between perfectly competitive and perfectly monopsonistic
markets was less than $700 per year.
Models of Competitive and Monopsonistic
28) Monopolistic and monopsonistic
markets are generally considered to be inefficient unless inefficiencies are offset by a Pareto improvement for consumers.
The federal government grew as a monopsonistic
buyer and managed care plans were able to negotiate discounts.
This result will not be reversed even if the foreign enterprise is a monopsonistic
Lowry and Winfrey (1974) hypothesized that markets with economies of scale, along with high raw material transportation costs, encourage the development of spatially dispersed firms with only one or just a few mills in any one area, which they called monopsonistic
or oligopsonistic input bases.
100) Employing its monopsonistic
pricing power, Pharmac has implemented a "sole-source, single tendering" system that denies U.
The Medicare end-stage renal disease (ESRD) program, as a virtually monopsonistic
buyer of ESRD-related services, offers an example of this phenomenon (Farley 1994).
On the other hand, long-term contracts provide suppliers with a predictable demand and thus encourage product innovation by reducing concerns over sunk costs of development, or of monopsonistic
exploitation of productivity advances by the manufacturer [Nishiguchi and Anderson 1995].