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10 - Monopsony and Merger Policy

Published online by Cambridge University Press:  08 February 2024

Brianna L. Alderman  and
Roger D. Blair
Brianna L. Alderman
Affiliation:
Harvard University, Massachusetts
Roger D. Blair
Affiliation:
University of Florida
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Summary

Mergers that involve issues of monopsony are addressed in this chapter. In some cases, a merger may be procompetitive or competitively neutral. In others, however, a merger may be anticompetitive and, therefore, should be barred. Horizontal mergers combine two (or more) firms that operate in the same output market. Since they employ similar workers, the merger may create monopsony power. Antitrust policy regarding horizontal mergers is provided by §7 of the Clayton Act and its judicial interpretation. Typically, the focus is on concentration in the output market, but there has been some recent recognition that a merger may have ill effects in the labor market. We examine this recent concern and provide some examples.

Keywords

MergersClayton Actmonopsonymarket definitionenforcement
Type
Chapter
Information
Monopsony in Labor Markets
Theory, Evidence, and Public Policy
 , pp. 160 - 180
Publisher: Cambridge University Press
Print publication year: 2024

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