Tuesday, July 15, 2008

Today's Word is Monopsony: mə-ˈnäp-sə-nē, II

I mooted this idea last November*:
In economics, a monopsony (from Ancient Greek μόνος (monos) "single" + ὀψωνία (opsōnia) "purchase") is a market form with only one buyer, called "monopsonist," facing many sellers. It is an instance of imperfect competition, symmetrical to the case of a monopoly, in which there is only one seller facing many buyers. The term "monopsony" was first introduced by Joan Robinson[1] (1933). The term "monopsony power", in a manner similar to "monopoly power" is used by economists as a short hand reference to buyers who face an upwardly sloping supply curve but that are not the only buyer; better, but more cumbersome terms may be oligopsony or monopsonistic competition. A monopsonist may be at the same time a monopolist....MORE

From Reuters:
Limit oil price or face more nuclear power - Italy

Italian Prime Minister Silvio Berlusconi said on Sunday oil-consuming countries should meet to fix a maximum price they are prepared to pay for oil, warning otherwise they would have to invest heavily in nuclear power.

Denouncing the "unfair" movement of wealth from consumer nations to oil-producing countries and the "exponential" rise in prices, Berlusconi issued what he said was a threat to oil exporters, saying his proposal for a meeting had the approval of British Prime Minister Gordon Brown.

"Consumer countries need to meet as soon as possible, maybe in London, to reach an agreement on a maximum price for oil which cannot be breached," Berlusconi told reporters after a summit of EU and Mediterranean leaders....MORE

*I figured it was moot because the alternative is scarcity, or as Viktor Chernomyrdin, former head of Gazprom said, in a different context:

"We meant to do better, but it came out as always"