AB-2010-55-3-08-BLAIR, Mergers to Monopsony: An Efficiencies Defense By Roger D. Blair

In a classic article, Oliver Williamson introduced the efficiency
defense to antitrust merger analysis. In this article, I extend his
analysis to mergers among buyers that may create monopsony
power. When such mergers are accompanied by merger-specific
efficiencies, there is necessarily a welfare tradeoff. Evaluating the
impact of the merger on social welfare requires a comparison of the
cost savings that can be realized only without the merger and the
allocative inefficiency due to the exercise of monopsony power.