oligopsony: meaning, definition, pronunciation and examples
C2Formal, Academic, Technical, Business/Finance
Quick answer
What does “oligopsony” mean?
A market situation where a small number of large buyers control the demand for a product or service, giving them significant power over sellers and prices.
Audio
Pronunciation
Definition
Meaning and Definition
A market situation where a small number of large buyers control the demand for a product or service, giving them significant power over sellers and prices.
An economic market structure characterized by few buyers and many sellers. It is the demand-side equivalent of an oligopoly (few sellers). This concentration of buying power allows the oligopsonists to influence prices and terms to their advantage, potentially suppressing wages in labor markets or prices in commodity markets.
Dialectal Variation
British vs American Usage
Differences
No significant lexical or definitional differences. Spelling follows national conventions (e.g., 'labour market oligopsony' in UK vs. 'labor market oligopsony' in US contexts).
Connotations
Equally technical and neutral in both dialects. Connotations depend entirely on context (e.g., negative in discussions of worker exploitation, neutral in theoretical models).
Frequency
Extremely low frequency in both, but slightly more common in US academic economics due to larger volume of publications. Remains a niche term.
Grammar
How to Use “oligopsony” in a Sentence
[oligopsony] + [in/of] + [market/industry] (e.g., oligopsony in the cocoa trade)An oligopsony [exists/operates] in...The [industry] is characterized by oligopsony.Vocabulary
Collocations
Examples
Examples of “oligopsony” in a Sentence
verb
British English
- The market has become oligopsonised, to the detriment of growers.
- Regulators aim to prevent large retailers from oligopsonising the fresh produce sector.
American English
- The industry is becoming increasingly oligopsonized, driving down farmgate prices.
- Tech giants were accused of oligopsonizing the market for AI talent.
adjective
British English
- They operate in an oligopsonistic labour market.
- The oligopsonistic practices of the major supermarket chains are under scrutiny.
American English
- The market structure is clearly oligopsonistic.
- An oligopsonistic buyer can dictate contract terms.
Usage
Meaning in Context
Business
Used in strategic analysis: 'Suppliers are vulnerable due to the oligopsony in the automotive parts sector.'
Academic
Central term in industrial organization economics: 'The model examines welfare losses under conditions of oligopsony.'
Everyday
Virtually never used in everyday conversation.
Technical
Precise descriptor in antitrust law, agricultural economics, and labor economics reports.
Vocabulary
Synonyms of “oligopsony”
Strong
Neutral
Weak
Vocabulary
Antonyms of “oligopsony”
Watch out
Common Mistakes When Using “oligopsony”
- Confusing it with 'oligopoly' (few sellers).
- Using it to describe any situation with weak demand, rather than concentrated buying power.
- Mispronouncing the 'ps' cluster (it is /ps/, not /s/).
FAQ
Frequently Asked Questions
An oligopoly involves few sellers controlling the supply side of a market. An oligopsony involves few buyers controlling the demand side. They are mirror concepts.
Not inherently. However, if oligopsonistic power is abused to fix prices paid to suppliers or to create barriers to entry, it may violate antitrust or competition laws.
The global market for cocoa beans is often cited. A small number of multinational chocolate manufacturers purchase from millions of smallholder farmers, giving them significant price-setting power.
In many regions or industries (e.g., hospital nurses in a rural area), workers may have only a few potential employers. This 'employer oligopsony' can limit wage growth and job mobility.
A market situation where a small number of large buyers control the demand for a product or service, giving them significant power over sellers and prices.
Oligopsony is usually formal, academic, technical, business/finance in register.
Oligopsony: in British English it is pronounced /ˌɒlɪˈɡɒpsəni/, and in American English it is pronounced /ˌɑːlɪˈɡɑːpsəni/. Tap the audio buttons above to hear it.
Learning
Memory Aids
Mnemonic
Think: OLIGO (few) + OPSONY (from Greek 'opsonia' = purchase). Few buyers doing the purchasing.
Conceptual Metaphor
MARKET AS A BATTLEFIELD (where few powerful buyers besiege many weaker sellers).
Practice
Quiz
What is the key characteristic of an oligopsony?