World Library  
Flag as Inappropriate
Email this Article

Duopoly

Article Id: WHEBN0000007939
Reproduction Date:

Title: Duopoly  
Author: World Heritage Encyclopedia
Language: English
Subject: Microeconomics, Oligopoly, Economics, Monopoly, Economy of Egypt
Collection: Market Structure and Pricing, Oligopoly
Publisher: World Heritage Encyclopedia
Publication
Date:
 

Duopoly

Visa and Mastercard are the two largest payment processors in the world. Because their competitors are so small in comparison, Visa and Mastercard may be considered a duopoly.

A true duopoly (from industrial organization, it is the most commonly studied form of oligopoly due to its simplicity.

Contents

  • Duopoly models in economics 1
  • Politics 2
  • Examples in business 3
  • Media 4
  • Broadcasting 5
  • See also 6
  • References 7

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 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 Airtel 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".

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. 
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and USA.gov, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for USA.gov and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
 
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
 
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.
 


Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.