Template-Type: ReDIF-Paper 1.0
Title: Acquihiring for Monopsony Power
Author-Name: Heski Bar-Isaac
Author-Email: heski.bar.isaac@rotman.utoronto.ca
Author-Name: Justin P. Johnson
Author-Email: jpj25@cornell.edu
Author-Name: Volker Nocke
Author-Email: volker.nocke@gmail.com
Classification-JEL: J42, L13, M12
Keywords: Acquihiring, acquisitions, monopsony power, specialized labor markets, competition policy

Abstract: It is often argued that startups are acquired for the sole purpose of
hiring specialized talent. We show that the goal of such acquihires might be to
shut down the most relevant labor market competitor. This grants the acquirer
monopsony power over specialized talent. As a consequence, acquihiring may harm
employees and be socially inefficient. We explore the robustness of these effects,
allowing for private benefits associated with working at a startup, varying bargaining
protocols, multiple employees with and without complementarities, and private
information.


Note: 
Length: 20
Creation-Date: 2024-01
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp500
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_500