An oligopsony (from Ancient Greek ὀλίγοι (oligoi) "few" + ὀψωνία (opsōnia) "purchase") is a market form in which the number of buyers is small while the number of sellers in theory could be large. This typically happens in a market for inputs where numerous suppliers are competing to sell their product to a small number of (often large and powerful) buyers. It contrasts with an oligopoly, where there are many buyers but few sellers. An oligopsony is a form of imperfect competition.

The terms monopoly (one seller), monopsony (one buyer), and bilateral monopoly have a similar relationship.

One example of an oligopsony in the world economy is cocoa, where three firms (Cargill, Archer Daniels Midland, and Callebaut) buy the vast majority of world cocoa bean production, mostly from small farmers in third-world countries. Likewise, American tobacco growers face an oligopsony of cigarette makers, where three companies (Altria, Brown & Williamson, and Lorillard Tobacco Company) buy almost 90% of all tobacco grown in the US.[citation needed]

In each of these cases, the buyers have a major advantage over the sellers. They can play off one supplier against another, thus lowering their costs. They can also dictate exact specifications to suppliers, for delivery schedules, quality, and (in the case of agricultural products) crop varieties. They also pass off much of the risks of overproduction, natural losses, and variations in cyclical demand to the suppliers.


  • Bhaskar, V., A. Manning and T. To (2002) 'Oligopsony and Monopsonistic Competition in Labor Markets,' Journal of Economic Perspectives, 16, 155–174.
  • Bhaskar, V. and T. To (2003) 'Oligopsony and the Distribution of Wages,' European Economic Review, 47, 371-399.
  • Oligopoly Watch A blog on current oligopoly and oligopsony issues from a business and social perspective

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  • oligopsony — [äl΄i gäp′sə nē] n. pl. oligopsonies [ OLIG(O) + Gr opsōnia, a purchase of food, catering < opsōnein: see OPSONIN] control of the purchase of a commodity or service in a given market by a small number of buyers oligopsonist n. oligopsonistic… …   English World dictionary

  • Oligopsony — Similar to an oligopoly (few sellers), this is a market in which there are only a few large buyers for a product or service. This allows the buyers to exert a great deal of control over the sellers and can effectively drive down prices. A good… …   Investment dictionary

  • oligopsony — noun Etymology: olig + Greek opsōnia purchase of victuals, from opsōnein to purchase victuals, from opson food + ōneisthai to buy more at venal Date: 1942 a market situation in which each of a few buyers exerts a disproportionate influence on the …   New Collegiate Dictionary

  • oligopsony — oligopsonistic, adj. /ol i gop seuh nee/, n. the market condition that exists when there are few buyers, as a result of which they can greatly influence price and other market factors. Cf. duopsony, monopsony. [1940 45; OLIG + Gk opsonía purchase …   Universalium

  • oligopsony — noun An economic condition in which a small number of buyers exert control over the market price of a commodity. See Also: oligopsonist, oligopsonistic, oligopsonistically …   Wiktionary

  • oligopsony — A market characterized by a small number of large buyers who control all purchases and therefore the market price of a good or service. Bloomberg Financial Dictionary …   Financial and business terms

  • oligopsony — É‘lɪ gÉ‘psÉ™nɪ / É’lɪgÉ’ n. strong influence of a small group of buyers (Economics) …   English contemporary dictionary

  • oligopsony — [ɒlɪ gɒps(ə)ni] noun (plural oligopsonies) a state of the market in which only a small number of buyers exists for a product. Origin 1940s: from oligo , on the pattern of monopsony …   English new terms dictionary

  • oligopsony — ol·i·gop·so·ny …   English syllables

  • oligopsony — ol•i•gop•so•ny [[t]ˌɒl ɪˈgɒp sə ni[/t]] n. pl. nies the market condition that exists when there are few buyers, who can thereby greatly influence price and other market factors • Etymology: 1940–45; olig + Gk opsōnía purchase of provisions,… …   From formal English to slang

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