Duopoly

Duopoly

A true duopoly (from Greek dyo / δυο (two) + polein / πωλειν (to sell)) is a specific type of oligopoly where only two producers exist in one market. In reality, this definition is generally used where only two firms have dominant control over a market. In the field of industrial organization, it is the most commonly studied form of oligopoly due to its simplicity.

Contents

Duopoly models in economics

There are two principal duopoly models, Cournot duopoly and Bertrand duopoly:

  • The Cournot model, which shows that two firms assume each others output and treat this as a fixed amount, and produce in their own firm according to this.
  • The Bertrand model, in which, in a game of two firms, each one of them will assume that the other will not change prices in response to its price cuts. When both firms use this logic, they will reach a Nash equilibrium.

Politics

Modern American politics has been described as a duopoly since the Republican and Democratic parties have dominated and framed policy debate as well as the public discourse on matters of national concern for about a century and a half. Third Parties have encountered various blocks in getting onto ballots at different levels of government as well as other electoral obstacles, more so in recent decades.

See List of political parties in the United States for a more comprehensive look at the politics of the Two-party system, Duverger's law.

Examples in business

The most commonly cited duopoly is that between Visa and Mastercard, who between them control a large proportion of the electronic payment processing market. In 2000 they were the defendants in a US Department of Justice antitrust lawsuit.[1][2] An appeal was upheld in 2004.[3]

Examples where two companies control a large proportion of a market are:

Media

In Finland, the state-owned broadcasting company Yleisradio and the private broadcaster Mainos-TV had a legal duopoly (in the economists' sense of the word) from the 1950s to 1993. No other broadcasters were allowed. Mainos-TV operated by leasing air time from Yleisradio, broadcasting in reserved blocks between Yleisradio's own programming on its two channels. This was a unique phenomenon in the world. Between 1986 and 1992 there was an independent third channel but it was jointly owned by Yle and MTV; only in 1993 did MTV get its own channel. Safaricom mobile service provider and Zain in Kenya are perfect examples of Duopoly market in African telecommunication industry.

Broadcasting

Duopoly is also used in the United States broadcast television and radio industry to refer to a single company owning two outlets in the same city.

This usage is technically incompatible with the normal definition of the word and leads to confusion, inasmuch as there are generally more than two owners of broadcast television stations in markets with broadcast duopolies. In Canada, this definition is therefore more commonly called a "twinstick".

Board games

The board game Monopoly Junior is sometimes referred to as "Duopoly".[citation needed]

See also

References


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Look at other dictionaries:

  • duopoly — du‧op‧o‧ly [djuˈɒpəli ǁ duˈɑː ] noun duopolies PLURALFORM [countable usually singular] ECONOMICS a market in which there are only two producers or sellers: • With the merger of Greyhound and Trailways, the bus duopoly has become a monopoly. * * * …   Financial and business terms

  • duopoly — duopoly/duopolistic A market dominated by two producers or suppliers. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • duopoly — ► NOUN (pl. duopolies) ▪ a situation in which two suppliers dominate a market …   English terms dictionary

  • duopoly — [do͞o äp′ə lē, dyo͞oäp′ə lē] n. [ DUO + (MONO)POLY] control of a commodity or service in a given market by only two producers or suppliers …   English World dictionary

  • duopoly — [[t]dju͟ːɒ̱pəli[/t]] duopolies 1) N VAR If two companies or people have a duopoly on something such as an industry, they share complete control over it and it is impossible for others to become involved in it. 2) N COUNT A duopoly is a group of… …   English dictionary

  • duopoly — UK [djuːˈɒpəlɪ] / US [duˈɑpəlɪ] noun [countable] Word forms duopoly : singular duopoly plural duopolies business a) a situation in which two companies, people, or groups control something such as a business activity or industry b) two companies,… …   English dictionary

  • duopoly — /dju: ɒpəli/ noun the existence of only two producers or suppliers in a market ● The duopoly meant that the two businesses collaborated to keep prices at very high levels. ● When they took over their only competitor in the market, the duopoly… …   Marketing dictionary in english

  • duopoly — A market in which there are only two producers or sellers of a particular product or service and many buyers. The profits in such an imperfect form of competition are in practice usually less than could be achieved if the two suppliers merged to… …   Big dictionary of business and management

  • Duopoly (disambiguation) — Duopoly can refer to: Duopoly, a specific type of oligopoly where only two producers exist in one market Duopoly (broadcasting), in the United States, a single company which owns two or more radio or televtion stations in the same city or… …   Wikipedia

  • Duopoly (broadcasting) — For other uses, see Duopoly (disambiguation). In United States broadcast television and radio, duopoly is a term used to describe a single company which owns two or more stations in the same city or community. This usage is technically… …   Wikipedia

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