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Oligopsonistic Cats and Dogs

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  • Gerda Dewit
  • Dermot Leahy

Abstract

We study the strategic investment behaviour of oligopsonistic rivals in the labour market. Under wage competition, firms play "puppy dog" with productivityaugmenting investment and "fat cat" with supply-enhancing investment. Under employment competition, investing strategically always involves playing "top dog".
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Suggested Citation

  • Gerda Dewit & Dermot Leahy, 2009. "Oligopsonistic Cats and Dogs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(3), pages 257-274, November.
    • Handle: RePEc:kap:revind:v:35:y:2009:i:3:p:257-274
    DOI: 10.1007/s11151-009-9216-1
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    References listed on IDEAS

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    1. Manning, Alan, 2004. "Monopsony and the efficiency of labour market interventions," Labour Economics, Elsevier, vol. 11(2), pages 145-163, April.
    2. Neary, J Peter & Leahy, Dermot, 2000. "Strategic Trade and Industrial Policy towards Dynamic Oligopolies," Economic Journal, Royal Economic Society, vol. 110(463), pages 484-508, April.
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    9. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
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    Cited by:

    1. Tabasso, D, 2009. "Temporary Contracts and Monopsony Power in the UK Labour Market," Economics Discussion Papers 8938, University of Essex, Department of Economics.
    2. Coccorese, Paolo, 2012. "Banks as ‘fat cats’: Branching and price decisions in a two-stage model of competition," Journal of Economics and Business, Elsevier, vol. 64(5), pages 338-363.

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    More about this item

    Keywords

    Labour productivity augmenting investment; Labour supply augmenting investment; Oligopsony; Strategic behaviour;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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