TY  - RPRT
        AU  - Kaas, Leo
AU  - Madden, Paul
        TI  - Holdup in Oligopsonistic Labour Markets: A New Role for the Minimum Wage
        PY  - 2006/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2043
        UR  - https://www.iza.org/publications/dp2043
        AB  - 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.
        KW  - minimum wage
KW  - investment
KW  - holdup
        ER  -