Exploitation in Monopsony

Chung-cheng Lin ()
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Chung-cheng Lin: Institute of Economics, Academia Sinica, Taipei, Taiwan, https://www.econ.sinica.edu.tw/

No 12-A001, IEAS Working Paper : academic research from Institute of Economics, Academia Sinica, Taipei, Taiwan

Abstract: A key feature of monopsony is that a single firm pays its workers a wage ( w) less than the marginal revenue product (MRP ). Ever since its creation by Joan Robinson (1933), this feature has been explained as a symbol of the monopsonistic firm exploiting its workers. By using a simple standard efficiency wage model of Yellen (1984), this paper examines the conventional wisdom by showing that the firm pays workers w

Keywords: Monopsony; exploitation; efficiency wages (search for similar items in EconPapers)
JEL-codes: J01 J42 J44 J6 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2012-05
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