Simple Static Monopsony

Boris Hirsch ()
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Boris Hirsch: Friedrich-Alexander-Universität Erlangen-Nürnberg

Chapter Chapter 2 in Monopsonistic Labour Markets and the Gender Pay Gap, 2010, pp 11-14 from Springer

Abstract: Abstract A good starting point for the discussion of spatial monopsony is a simple static monopsony model in the fashion of Robinson (1969, pp. 211–231), i.e., considering a spaceless market for homogenous labour with a single non-discriminating firm producing a homogenous commodity from its labour input.1 This single firm has not to bother with other firms’ decisions and is unable to pay different wages to its employees. Let 2.1 $$\begin{array}{rcl}{ L}^{s} : = L(w)& &\end{array}$$ denote the firm’s labour supply. Assume that the wage w is the firm’s only instrument to affect the quantity of labour supplied to it and that L is twice continuously differentiable with L′(w) > 0 for all w > 0.2 Since the firm is the single buyer in this labour market, the firm’s labour supply is identical to market labour supply, so that we have both upward-sloping labour supply at the level of the firm and the market. Let in the following w(L) denote the inverse of L(w).

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-10409-1_2

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DOI: 10.1007/978-3-642-10409-1_2

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