%0 Report
        %A Kaas, Leo
%A Madden, Paul
        %T Holdup in Oligopsonistic Labour Markets: A New Role for the Minimum Wage
        %D 2006
        %8 2006 Mar
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 2043
        %U https://www.iza.org/publications/dp2043
        %X We consider a labour market model of oligopsonistic wage competition and show that there is a holdup problem although workers do not have any bargaining power. When a firm invests more, it pays a higher wage in order to attract workers from competitors. Because workers participate in the returns on investment while only firms bear the costs, investment is inefficiently low. A binding minimum wage can achieve the first–best level of investment, both in the short run for a given number of firms and in the long run when the number of firms is endogenous.
        %K minimum wage
%K investment
%K holdup