monopsony

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English[edit]

WOTD – 17 November 2018

Etymology[edit]

From Ancient Greek μόνος (mónos, “alone, solitary; singular, unique”) + ὀψωνέω (opsōnéō, “to buy fish or victuals in general”) + -y, modelled after monopoly. ὀψωνέω is from ὄψον (ópson, “delicacies”) + ὠνέομαι (ōnéomai, “to buy, purchase”). The English word was coined by British classics scholar Bertrand Hallward (1901–2003), and popularized by British economist Joan Robinson (1903–1983) in her book The Economics of Imperfect Competition (1933): see the quotation.

Pronunciation[edit]

Noun[edit]

monopsony (plural monopsonies)

  1. (economics) A market situation in which there is only one buyer for a product. [from 1930s]
    Antonym: monopoly
    Coordinate terms: duopsony, oligopsony
    • 1933, Joan Robinson, “Monopsony”, in The Economics of Imperfect Competition, London: Macmillan and Co., Limited […], →OCLC, section 2, page 219:
      Our next task is to consider the change in the amount of a commodity purchased when the market changes from an indefinitely large number of competing buyers to a single buying agency. This may be described as the comparison between competitive and monopsony buying, just as the corresponding comparison for selling was called the comparison between competitive and monopoly output.
    • 1971, Martin Bronfenbrenner, “Imperfect Competition and Exploitation”, in Income Distribution Theory (Aldine Treatises in Modern Economics), Chicago, Ill.: Aldine-Atherton, →ISBN; republished Piscataway, N.J.: AldineTransaction, Transaction Publishers, 2007 (2009 (2nd paperback) printing), →ISBN, pages 193–194:
      It appears to follow that employment, far from falling, may be raised by an adroitly contrived legal minimum wage or collective agreement. Indeed, this proposition is an important one in the theory of both wage regulation and trade unionism. Its applicability is sometimes limited, however, even when monopsony is significant, by the danger that the employer may be driven out of business completely, as when, because of his own irremediable inefficiency or other objective disadvantages, monopsony profit achieved at his workers' expense is the differential between hanging on and outright failure.
    • 2007, Stephen G. Hannaford, “Oligopolies and Oligopsonies”, in Market Domination!: The Impact of Industry Consolidation on Competition, Innovation, and Consumer Choice, Westport, Conn.: Praeger Publishers, Greenwood Publishing Group, →ISBN, page 15:
      Examples of monopsonies are few. One limited monopsony is the U.S. federal government, which orders certain defense and security systems often with the condition that it be the sole client to be delivered the product, thus a monopsony. […] Indeed, any government is a natural monopsony, at least in some areas. Absolutist, state-run economies, like [Joseph] Stalin's Soviet Union or North Korea, are dominated by monopolies and monopsonies, which often are granted to cronies by those in power. […] In today's commercial markets, there are next to no true large monopsonies.
    • 2010, Roger D. Blair, Jeffrey L. Harrison, “The Antitrust Laws and Monopsonistic Forms of Conduct”, in Monopsony in Law and Economics, Cambridge: Cambridge University Press, →ISBN, section 2.4 (A Taxonomy of Monopsony Cases), page 29:
      For purposes of evaluating monopsony cases from the standpoint of economic efficiency, it makes sense to adopt a "purpose"-oriented classification system. After all, all monopsony cases can be reduced to either a unilateral or collusive use of buying power in order to promote the interests of the buyer.
  2. (economics) A buyer with disproportionate power.
    • 1978, Roger K. Chisholm, Marilu Hurt McCarty, Principles of Microeconomics, Glenview, Ill.: Scott, Foresman, →ISBN, page 344:
      The result is different when the resource buyer is a monopsony. The monopsony firm is a single buyer, and therefore it faces the market supply curve.
    • 2014 March 15, “Turn it off: American regulators should block Comcast’s proposed deal with Time Warner Cable”, in The Economist‎[1], volume 410, number 8878, archived from the original on 14 March 2014:
      If the takeover is approved, Comcast would control 20 of the top 25 cable markets, […]. Antitrust officials will need to consider Comcast’s status as a monopsony (a buyer with disproportionate power), when it comes to negotiations with programmers, whose channels it pays to carry.
    • 2020 November 4, Christian Wolmar, “Hubble trouble: we need co-operation on innovation...”, in Rail, page 49:
      Network Rail is a monopsony (the sole buyer in a particular market) and must be careful not to exploit that position.

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