(Please note that I have a long position in Rightmove (LON:RMV))
Have you ever heard of a monopsony? It’s one of those rare words which you might learn for an exam, and then never think about again.
It means a market where there is only one buyer of a product or service. This makes it the opposite of a monopoly, which is a market where there is only seller. Monopolies are in general considered to be undesirable, and monopsonies are their mirror image.
A monopsony sometimes arises in the labour market, where a person’s skills are specialised to such an extent that their labour is only very useful to one firm. That one firm is willing to keep “buying” those skills (i.e. hiring that individual), but the skills aren’t of much use to anybody else.
In reality, most skills are transferable. But for example, when someone spends their entire working life at a single company, their understanding of that organisation and its culture reaches an extraordinary level, and their skills have probably become specialised to that organisation.
The same phenomenon can arise in particular locations where there is only one large employer. This employer is the main “buyer” of…
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