Why Non-Compete Agreements Make Sense

Why Non-Compete Agreements Make Sense
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I sometimes learn from people’s comments. So I want to hat tip a recent commenter on one of my four pieces on the Council of Economic Advisers’ report on alleged monopsony in the labor market. In Part II, I said that non-compete agreements for workers who don’t have company secrets seem to “suck.” Well, at least I said “seem.” My late professor and mentor Armen Alchian would have tut-tutted if he had seen that. One of the most important things I learned from Armen is that when you see a practice that is adopted voluntarily but that doesn’t seem to make sense, don’t immediately assume that it doesn’t make sense. Instead, ask under what conditions it might make sense.

Non-Compete Agreements

I forgot that momentarily.

But commenter Aaron McNay caught my error, pointing out:

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