Duopoly

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A true duopoly is a form of oligopoly where only two producers exist in a market. In reality, this definition is generally eased whereby two firms must only 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.

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Duopoly Models in Economics

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

  • The Cournot model, which shows that two firms react to one another's production (quantity) changes until they reach a Nash equilibrium.
  • 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.
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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 obstacles to getting onto ballots at different levels of government, 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.

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Examples in Business

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Broadcasting

Duopoly is also used in the broadcast television and radio industry, referring to a single company owning two outlets in the same city. In the United States, this has been frowned upon when using public airwaves, as it gives too much influence to one company. In Canada, this definition is more commonly called a "twinstick".

See also concentration of media ownership.

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Examples in American television

There is a unique situation in Salt Lake City, where the NBC affiliate KSL-TV is owned by Bonneville International, and a PBS station, KBYU-TV, is owned by BYU. Both Bonneville and BYU are part of the LDS Church, and although they are on separate licenses, the fact that the ultimate owner is the LDS Church makes these stations a duopoly in a way.

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See also

de:Duopol es:Duopolio fr:Duopole he:דואופול hu:Duopólium ja:複占 no:Duopol sv:Duopol

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