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Acquihiring for Monopsony Power

Author

Listed:
  • Bar-Isaac, Heski
  • Johnson, Justin
  • Nocke, Volker

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.

Suggested Citation

  • Bar-Isaac, Heski & Johnson, Justin & Nocke, Volker, 2023. "Acquihiring for Monopsony Power," CEPR Discussion Papers 18573, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18573
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    Cited by:

    1. is not listed on IDEAS
    2. Luca Verginer & Federica Parisi & Jeroen Lidth de Jeude & Massimo Riccaboni, 2025. "Acquisitions as catalysts for inventor departures in the biotechnology industry," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    3. Yassine Lefouili & Leonardo Madio, 2025. "Mergers and Investments: Where Do We Stand?," Working Papers hal-05129593, HAL.

    More about this item

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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