Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, June 18, 2019

Labor Monopsony and the Limits of the Law

Suresh Naidu, Columbia University and Eric A. Posner, University of Chicago - Law School discuss Labor Monopsony and the Limits of the Law.

ABSTRACT: Recent literature has suggested that antitrust regulation is an appropriate response to labor market monopsony. This article qualifies the primacy of antitrust by arguing that a significant degree of labor market power is “frictional,” that is, without artificial barriers to entry or excessive concentration of employment. If monopsony is pervasive under conditions of laissez-faire, antitrust is likely to play only a partial role in remedying it, and other legal and policy instruments to intervene in the labor market will be required.

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