STRATEGY AND BUSINESS ECONOMICS


Acquihiring for Monopsony Power


JUSTIN P. JOHNSON


DEANE W. MALOTT PROFESSOR OF MANAGEMENT Samuel Curtis Johnson Graduate School of Management


Cornell SC Johnson College of Business Cornell University


Management Science, 71, 4, April 2025 LINK TO PAPER


Co-authors • Justin P. Johnson Deane W. Malott Professor of Management, Samuel Curtis


Johnson Graduate School of Management, Cornell SC Johnson College of Business, Cornell University


• Heski Bar-Isaac, Rotman School of Business, University of Toronto, Ontario, Canada • Volker Nocke, University of Mannheim, Germany


Summary It is often argued that startups are acquired for the sole purpose of hiring spe-


cialized talent. Te authors show that the goal of such acquihires might be to shut down the most relevant labor market competitor. Tis grants the acquirer monopsony power over specialized talent.


As a consequence, acquihiring may harm employees and be socially ineffi- cient. Te authors 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 infor- mation.


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2025 EDITION


58


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100