Monopsony. Suppose that P faces no competition in the market for A’s services, so that she can set yi  qi if she can identify A’s type, and y  ! if she cannot. Suppose that the qi type has a...

Monopsony. Suppose that P faces no competition in the market for A’s services, so that she can set yi  qi if she can identify A’s type, and y  ! if she cannot. Suppose that the qi type has a disutility of work or reservation wage of ri  0, with r2  r1  0. Under what conditions would P prefer the pooling equilibrium to the separating equilibrium?