duopoly

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duopoly

A condition in which two entities dominate a market. Pronounced "doo-op-a-lee." For example, Windows and Mac are a personal computer duopoly. iOS and Android are a smartphone duopoly.

Duopoly

 

a term used in bourgeois political economy to define a market structure of a sector of the economy in developed capitalist countries in which there are only two suppliers of a certain commodity and they have made no monopolistic agreements on prices, markets, production quotas, etc.

The concept of duopoly reflects various forms of market organization. The first form is a market that is dominated by two large commercial-industrial companies having a secret agreement ensuring maximum profit through nonequivalent exchange. Such a situation was typical in the beginning of the 20th century. The second form is a market of some contemporary sector of mass production that is controlled by two companies. Usually there exists between them a tacit agreement on monopolistic prices, and nonprice competition is practiced. The third form is a market in which there are two suppliers but a complete absence of any monopolistic agreement. This is possible under two conditions: the temporary situation in which a new commodity is initally being produced, involving a “test of strength” between two suppliers, and the situation in which competition is bitter during a transition period from simple to more developed forms of monopoly. Some bourgeois economists point to the latter to prove the possibility of a continuous absence of monopoly in conditions of highly concentrated production. The majority of contemporary bourgeois economists, however, consider duopoly as a variety of monopoly (a view that corresponds to the facts).

Economic and mathematical research in duopoly was begun in the 19th century by A. Cournot and J. Bertrand of France and F. Edgeworth of Great Britain. In the 1930’s, H. Stackelberg (Germany) described certain aspects of duopoly that depended on the conduct of duopolists. The contemporary theory about duopoly originated under the influence of the monopolistic competition theories of E. H. Chamberlin (USA) and the imperfect competition theories of J. Robinson (England); the works of R. Triffin (USA) began to take into account the more complicated character of real market conditions, such as the interdependence of economic sectors, the changes in demand and in assets, different kinds of duopoly and market institutions, the scope of information about the market, and so on.

REFERENCES

Chamberlin, E. H. Teoriia monopolisticheskoi konkurentsii. Moscow, 1959. (Translated from English.)
James, E. Istoriia ekonomicheskoi mysli XX v. Moscow, 1959. (Translated from French.)
Seligman, B. Osnovnye techeniia sovremennoi ekonomicheskoi mysli. Moscow, 1968. (Translated from English.)
Neumann, J., and O. Morgenstern. The Theory of Games and Economic Behavior. Princeton, 1944.

IU. A. VASIL’CHUK

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