A true duopoly + polein πωλεῖν) 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:
The Cournot model, which shows that two firms assume each other's 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, 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. An appeal was upheld in 2004.
Examples where two companies control a large proportion of a market are:
Airbus and Boeing in the market for large commercial airplanes. See also:
Competition between Airbus and Boeing. Televisa and Azteca in the Mexican
Television market. Woolworths and Coles in the Australian
supermarket market. Mitre 10 MEGA and Bunnings Warehouse in
the Australian and New Zealand retail/trade timber and hardware market.
Intel and AMD in X86 CPU market and Nvidia and AMD in consumer and
professional PC GPU market. The BNSF Railway and Union Pacific
Railroad have a duopoly on all transcontinental freight rail lines in
the U.S. Norfolk Southern Railway and CSX
Transportation operate a duopoly on freight rail traffic in the Eastern
United States. Apple and Microsoft in the electronics
industry. Apple's iOS and Google's Android in the
mobile operating system market. Globe Telecom and Smart Communications
in the Philippine Telecomunnications industry.
Media In Finland, the state-owned broadcasting
company Yleisradio and the private broadcaster Mainos-TV had a legal
duopoly 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 Monopoly
Two-party system References