Online First Review of Economic Studies Online 22 May 2026Monopsony Makes Firms Not Only Small but Also Unproductive: Why East Germany Has Not ConvergedRüdiger Bachmann · Christian Bayer · Heiko Stüber · Felix WellschmiedWhen employers face a trade-off between growing large and paying low wages — that is, when they have monopsony power — some productive employers will decide to acquire fewer customers, forgo sales, …