Bilateral Monopoly

A market that has only one supplier and one buyer. The one supplier will tend to act as a monopoly power, and look to charge high prices to the one buyer. The lone buyer will look towards paying a price that is as low as possible. Since both parties have conflicting goals, the two sides must negotiate based on the relative bargaining power of each, with a final price settling in between the two sides's points of maximum profit.

Bilateral monopoly systems have most commonly been used by economists to describe the labor markets of industrialized nations in the 1800s and the early 20th century. Large companies would essentially monopolize all the jobs in a single town and use their power to drive wages to lower levels. Workers, to increase their bargaining power, formed labor unions with the ability to strike, and became an equal force at the bargaining table with regard to wages paid.

As capitalism continued to thrive in the U.S. and elsewhere, more companies were competing for the labor force, and the power of a single company to dictate wages decreased substantially. As such, the percentage of workers that are members of a union has fallen, while most new industries have formed without the need for collective bargaining groups among workers.


Investment dictionary. . 2012.

Look at other dictionaries:

  • bilateral monopoly — noun [C] (plural bilateral monopolies) ECONOMICS ► a situation in which there is only one buyer and only one seller in a market: »In a bilateral monopoly, the one supplier will look to charge a high price, and the lone buyer will want to pay the… …   Financial and business terms

  • Bilateral monopoly — In a bilateral monopoly there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. A bilateral monopoly model is often used in situations where the switching costs of both sides are prohibitively high. Bilateral …   Wikipedia

  • bilateral monopoly — A situation in which a monopoly seller bargains with a monopoly buyer (see monopsony). The classic application of bilateral monopoly is to the negotiation of wages between a union and a firm. The most famous solution (1950) is that stated by John …   Big dictionary of business and management

  • bilateral monopoly — Econ a market in which there is a single seller and a single buyer …   The ultimate business dictionary

  • bilateral monopoly — noun : a market condition in which only one buyer or one group of associated buyers confronts only one seller or one group of associated sellers …   Useful english dictionary

  • monopoly — Absolute control of all sales and distribution in a market by one firm, due to some barrier to entry of other firms, allowing the firm to sell at a higher price than the socially optimal price. Bloomberg Financial Dictionary * * * monopoly… …   Financial and business terms

  • Monopoly — This article is about the economic term. For the board game, see Monopoly (game). For other uses, see Monopoly (disambiguation). Competition law Basic concepts …   Wikipedia

  • Двусторонняя монополия — BILATERAL MONOPOLY Рынок, состоящий из одного продавца и одного покупателя. См. Monopoly, Monopsony …   Словарь-справочник по экономике

  • Monopsony — In economics, a monopsony (from Ancient Greek μόνος (monos) single + ὀψωνία (opsōnia) purchase ) is a market form in which only one buyer faces many sellers. It is an example of imperfect competition, similar to a monopoly, in which only one… …   Wikipedia

  • Монополия — (monopoly) Рынок, на котором действует единственный продавец (производитель). В том случае, когда имеется единственный продавец и единственный покупатель, ситуация называется двусторонняя монополия (bilateral monopoly) (cм. также:… …   Словарь бизнес-терминов

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