Duopoly

A duopoly (from Greek δύο, duo (two) + πωλεῖν, polein (to sell)) is a form of oligopoly where only two sellers exist in one market. In practice, the term is also used where 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.

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

1. Existence of only two sellers

2. Independence

3. Presence of monopoly elements: so long products are differentiated, the firms enjoy some monopoly power, as each product will have some loyal customers

4. There are two popular modes of duopoly, i.e., Cournot’s Model and Chamberlain’s Model.

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, such as denial of access to general election debates.

A commonly cited example of a duopoly is that involving 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.

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