Monopsony in the labor market: Profit vs. Wage maximization | Zendy

Suvakovic Djordje | Zendy; Goran Radosavljević | Zendy

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Monopsony in the labor market: Profit vs. Wage maximization

Author(s) -

Suvakovic Djordje,

Goran Radosavljević

Publication year - 2007

Publication title -

economic annals

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.148

H-Index - 12

eISSN - 1820-7375

pISSN - 0013-3264

DOI - 10.2298/eka0773007s

Subject(s) - monopsony , dominance (genetics) , wage , economics , profit maximization , disjoint sets , microeconomics , market size , profit (economics) , maximization , labour economics , mathematics , biology , biochemistry , combinatorics , commerce , gene

This paper compares the efficiency of profit- and wage-maximizing (PM and WM) monopsony in the labor market. We show that, both locally and globally, a PM monopsony may well be dominated by its WM twin, where the local and global dominance are defined with respect to a single (inverse) labor supply function and a single family of such functions. This family is always divided in the two disjoint (sub)families of the PM and WM dominance. We also analyze some major factors that explain the size of these (sub)families.

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