Acquihiring for Monopsony Power

Heski Bar-Isaac, Justin P. Johnson () and Volker Nocke

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: It is often argued that startups are acquired for the sole purpose of hiring specialized talent. We show that the goal of such acquihires might be to shut down the most relevant labor market competitor. This grants the acquirer monopsony power over specialized talent. As a consequence, acquihiring may harm employees and be socially inefficient. We explore the robustness of these effects, allowing for private benefits associated with working at a startup, varying bargaining protocols, multiple employees with and without complementarities, and private information.

Keywords: Acquihiring; acquisitions; monopsony power; specialized labor markets; competition policy (search for similar items in EconPapers)
JEL-codes: J42 L13 M12 (search for similar items in EconPapers)
Pages: 20
Date: 2024-01
New Economics Papers: this item is included in nep-com, nep-lma, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Acquihiring for Monopsony Power (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2024_500

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