Oligopsony

The oligopsony (from the Gr. ὀλίγος olígos ('little') and ὀψωνία opsōnía (' purchase')), is a situation of imperfect competition that arises in a market where there is a small number of applicants in which control and power over the prices and quantities of a product in the market is deposited. Therefore, the benefits would be concentrated in the buyers (in most cases, these buyers are intermediaries), but not in the producers, who see their situation worsen by not receiving a reasonable price for the products they produce.

Instances of oligopsony are more frequent than those of pure monopsony. An example may be car manufacturers in a country like Japan. For car seat manufacturers, there are only a small number of buyers, which are the few Japanese car assembly companies, who will therefore be able to control the quantities and prices of car seats, since they are the only buyers in the country of that product. Another example of international oligopsony is the world cocoa market, in which three companies (Cargill, Archer Daniels Midland and Callebaut) buy the vast majority of the world's cocoa production, mainly from small farmers in third world countries. A similar case is that of tobacco produced in the United States, where three companies (Altria, Brown & Williamson and Lorillard Tobacco Company) buy almost 90% of all tobacco grown in the United States.^{[citation needed ]}. A type of oligopsony studied by the scientific literature is labor markets, for example when there is collusion on the part of employers to pay all or a group of them a salary very similar to the minimum wage.