IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v116y2026i7p2504-41.html

Understanding High-Wage Firms: Monopoly, Monopsony, and Bargaining Power

Author

Listed:
  • Horng Chern Wong

Abstract

I study how firm market power and worker bargaining power shape wages and welfare. Using French micro-data, I document patterns linking wages and firm market power that existing models cannot explain. A model in which firms produce vertically differentiated goods and share profits with workers explains those patterns. The model (i) reveals new challenges in estimating monopsony and bargaining power, proposing an alternative approach; (ii) shows that the pass-through of firm-specific shocks to wages depends on the type of shock; (iii) explains how markups shape firm wage premia; and (iv) formalizes how strengthening worker bargaining power affects wages and welfare.

Suggested Citation

  • Horng Chern Wong, 2026. "Understanding High-Wage Firms: Monopoly, Monopsony, and Bargaining Power," American Economic Review, American Economic Association, vol. 116(7), pages 2504-2541, July.
    • Handle: RePEc:aea:aecrev:v:116:y:2026:i:7:p:2504-41
    DOI: 10.1257/aer.20230344
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20230344
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://doi.org/10.3886/E237981V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/25616
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/materials/25617
    Download Restriction: no
    File URL: https://libkey.io/10.1257/aer.20230344?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:116:y:2026:i:7:p:2504-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.