Duopoly

For other uses, see Duopoly (disambiguation).

A true duopoly (from Greek duo δύο (two) + polein πωλεῖν (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.

Duopoly models in economics

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

Politics

Modern American politics, in particular the electoral college system has been described as duopolistic 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.

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 U.S. 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 Airtel in Kenya are perfect examples of Duopoly market in the 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".

See also

References

  1. ↑ http://www.usdoj.gov/atr/cases/f1900/1973.htm
  2. ↑ http://mit.edu/thistle/www/v12/2/credit.html
  3. ↑ http://news.bbc.co.uk/1/hi/business/4014599.stm
  4. ↑ http://www.weeklytimesnow.com.au/article/2008/11/03/20101_latest-news.html Weeklytimesnow.com.au - Coles, Woolworths still dominate
  5. ↑ http://www.insideretailing.com.au/Default.aspx?tabid=53&articleType=ArticleView&articleId=3709 Insideretailing.com.au Some positive signs in the Coles businesses under Wesfarmers
  6. ↑ Kramer-Miller, Ben (June 25, 2013). "Norfolk Southern Corp. Looks Like A Solid Investment". Seeking Alpha. Retrieved October 7, 2014.
  7. ↑ "comScore Reports June 2015 U.S. Smartphone Subscriber Market Share". comScore, Inc. Retrieved 2015-11-17.
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