Preface

Summary

Preface

In 1993, we published a relatively short book, Monopsony: Antitrust Law and Economics (Princeton University Press). At that time, although monopsony had been a mainstay in the study of economics, the courts addressed it only rarely. No doubt, this neglect was due at least in part to two things. First, plaintiffs (and their lawyers) focused their attention on sellers, and, therefore, monopsony did not come up. Second, the ill effects of monopsony are somewhat counterintuitive. There was a mistaken belief among some that if monopsony power is used to lower prices, this must ultimately be beneficial to consumers. In most instances, this is faulty economic reasoning. This state of affairs was particularly difficult to understand since monopsony conditions and behavior abounded even then. Moreover, monopsony results in the same types of distributive and allocative issues raised by the exercise of monopoly power.

In the past eighteen years, much of this has changed. Increasingly, courts have decided cases that deal with the behavior of buyers. These cases arise in markets ranging from agriculture to health care to college and professional athletes. In addition, the number of contributions of other legal scholars to the monopsony literature has exploded since our initial effort. This focus on buyer behavior gives rise to complex issues. For example, when is a buying cooperative an illegal collusive monopsony? Does bilateral monopoly represent a “solution” to the problems monopsony presents? In addition, when the antitrust theory involves monopsony, how are the concepts of antitrust standing and injury to be applied?