Countervailing Market Power and Hospital Competition

Monopsony and Countervailing Power in the Market for Nurses

Introduction In recent years, there have been a number of antitrust suits filed by registered nurses (RNs) alleging that their wages and other terms of employment have been depressed through collusion among the hospitals in their local market. In most of these cases, the issue involved collusive monopsony, which is unlawful as discussed in the Supreme Court’s Mandeville Island Farms decision. T...

Countervailing Power and Upstream Innovation

We challenge the view that the presence of powerful buyers stifles suppliers’ incentives to innovate. Following Katz (1987), we model countervailing (or buyer) power as the ability of, in particular, large buyers to substitute away from a given supplier. We employ a bargaining framework and find that the presence of larger and more powerful buyers increases a supplier’s incentives to reduce mar...

Countervailing Power and Chain Stores

Countervailing Power and Product Diversity

To analyse the effects of countervailing power on product variety, I construct a model in which a monopoly manufacturer sells a set of differentiated products through a large retailer and many small, competitive retailers. It is shown that an increase in the countervailing power of the large retailer tends to reduce the number of products manufactured in equilibrium, and the reduction in produc...

Import Competition and Market Power: Canadian Evidence

This paper estimates price-marginal cost mark-ups for Canadian manufacturing industries during the 1970s in order to assess the impact of import competition on domestic market power. The results are mixed. Based on the analysis, there is no consistent evidence that imports had a beneficial impact on competition in the Canadian market during that period. One possible explanation for this finding...