The Sports Business as a Labor Market Laboratory

[Symposium: Sports Economics]

By Lawrence M. Kahn

Journal of Economic Perspectives, Summer 2000

With superior data on compensation and productivity, as well as the occurrence of abrupt, dramatic market structure and player allocation rules changes, sports labor markets offer an excellent setting in which to test economic hypotheses. This paper revie...

E-Books: A Tale of Digital Disruption

By Richard J. Gilbert

Journal of Economic Perspectives, Summer 2015

E-book sales surged after Amazon introduced the Kindle e-reader at the end of 2007 and accounted for about one quarter of all trade book sales by the end of 2013. Amazon's aggressive (low) pricing of e-books led to allegations that e-books were bankrupt...

Retrospectives: How Joan Robinson and B. L. Hallward Named Monopsony

By Robert J. Thornton

Journal of Economic Perspectives, Spring 2004

The term "monopsony" was introduced by Joan Robinson in her 1932 classic The Economics of Imperfect Competition, although she gives credit to classics scholar B.L. Hallward of Cambridge for the actual coining of the term. Even though the term has become w...

Correspondence

By Rendigs Fels

Journal of Economic Perspectives, Winter 1992

Correspondence and response regarding: An Update on Leontief's Complaint [Academic Economics] [Theory versus Empiricism in Academic Economics: Update and Comparison]. What We Do with Our Heroes [Is Probability Theory Relevant for Uncertainty? A Post...

Monopsony, Mobility, and Sex Differences in Pay: Missouri School Teachers

By Michael R. Ransom and Val E. Lambson

American Economic Review, May 2011

We examine the sex differences in the pay of school teachers in Missouri. In Missouri school districts, pay is determined by a salary schedule that maps teaching experience and education level of an individual to a salary level. In spite of this apparentl...

Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior

By Arindrajit Dube, Laura Giuliano, and Jonathan Leonard

American Economic Review, February 2019

We analyze how separations responded to arbitrary differences in own and peer wages at a large US retailer. Regression-discontinuity estimates imply large causal effects of own-wages on separations, and on quits in particular. However, this own-wage respo...

Monopsony in Online Labor Markets

By Arindrajit Dube, Jeff Jacobs, Suresh Naidu, and Siddharth Suri

American Economic Review: Insights, March 2020

Despite the seemingly low switching and search costs of on-demand labor markets like Amazon Mechanical Turk, we find substantial monopsony power, as measured by the elasticity of labor supply facing the requester (employer). We isolate plausibly exogenous...

Measuring Labor Market Power Two Ways

By José Azar, Ioana Marinescu, and Marshall Steinbaum

AEA Papers and Proceedings, May 2019

We compute the "applications elasticity" as a proxy for firm-level labor supply elasticity by regressing the applications to a given job on the posted wage. The average applications elasticity in our data is 0.42. We then relate our elasticity estimates t...

Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets

[Symposium: Issues in Antitrust]

By Carl Shapiro

Journal of Economic Perspectives, Summer 2019

Accumulating evidence points to the need for more vigorous antitrust enforcement in the United States in three areas. First, stricter merger control is warranted in an economy where large, highly efficient and profitable "superstar" firms account for an i...

Monopsony in the US Labor Market

By Chen Yeh, Claudia Macaluso, and Brad Hershbein

American Economic Review, July 2022

This paper quantifies employer market power in US manufacturing and how it has changed over time. Using administrative data, we estimate plant-level markdowns—the ratio between a plant's marginal revenue product of labor and its wage. We find most manuf...

Monopsony trends

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How much employer market power does the US manufacturing sector have?

Facts and Fantasies about Wage Setting and Collective Bargaining

[Symposium: Labor Market Institutions]

By Manudeep Bhuller, Karl Ove Moene, Magne Mogstad, and Ola L. Vestad

Journal of Economic Perspectives, Fall 2022

In this article, we document and discuss salient features of collective bargaining systems in the OECD countries, with the goal of debunking some misconceptions and myths and revitalizing the general interest in wage setting and collective bargaining. We ...

Firm Wages in a Frictional Labor Market

By Leena Rudanko

American Economic Journal: Macroeconomics, January 2023

This paper studies wage setting in a directed search model of multiworker firms facing within-firm equity constraints on wages. The constraints reduce wages, as firms exploit their monopsony power over their existing workers, rendering wages less responsi...

Monopsony Amplifies Distortions from Progressive Taxes

By David Berger, Kyle Herkenhoff, Simon Mongey, and Negin Mousavi

AEA Papers and Proceedings, May 2024

Progressive income taxes distort hiring and wages when firms have labor market power. We characterize this novel monopsony cost of progressivity in a simple monopsony economy and derive efficiency wedges that depend on progressivity. A simple quantificati...

Repeated Trading: Transparency and Market Structure

By Ayça Kaya and Santanu Roy

American Economic Review, August 2024

We analyze the effect of transparency of past trading volumes in markets where an informed long-lived seller can repeatedly trade with short-lived uninformed buyers. Transparency allows buyers to observe previously sold quantities. In markets with intrape...

Exploiting or Augmenting Labor?

By Michael Rubens, Yingjie Wu, and Mingzhi (Jimmy) Xu

American Economic Review: Insights

We show that existing ‘production approaches’ to markdown estimation do not separately identify factor price markdowns from factor-augmenting productivity levels. We propose a method to overcome this challenge and apply it to study the effects of o...

Monopsony and Employer Misoptimization Explain Why Wages Bunch at Round Numbers

By Arindrajit Dube, Alan Manning, and Suresh Naidu

American Economic Review, August 2025

We show that administrative hourly wage data exhibit considerable bunching at round numbers. We run two experiments randomizing wages around $0.10 and $1.00 to experimentally measure left-digit bias for identical tasks on Amazon Mechanical Turk; we fail t...

Monopsony in Labor Markets: Theory, Evidence, and Public Policy by Brianna L. Alderman and Roger D. Blair

By Marshall Steinbaum

Journal of Economic Literature

Firm Responses and Wage Effects of Foreign Demand Shocks with Fixed Labor Costs and Monopsony

By Emmanuel Dhyne, Ayumu Ken Kikkawa, Toshiaki Komatsu, Magne Mogstad, and Felix Tintelnot

American Economic Review, December 2025

We quantify the firm responses and real wage effects of foreign demand shocks. We use Belgian microdata to construct firm-specific measures of demand shocks, which capture that firms pass on foreign demand shocks to domestic suppliers. Our estimates of fi...