Duopoly
From Wikipedia, the free encyclopedia
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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[edit] Duopoly Models in Economics
There are two principal duopoly models, Cournot duopoly and Bertrand duopoly:
- The Cournot model, shows that two firms assume each others 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.
[edit] 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.
[edit] Examples in business
- Moody's vs S&P in Ratings market
- Pepsi vs Coca-Cola in soft drink market
- Gillette vs Schick in razor blade market
- Airbus vs Boeing in commercial jet aircraft market
- Sotheby's vs. Christie's in diamond auctions
- Marvel Comics vs. DC Comics in comic books
- Sirius vs. XM in the satellite radio market
- Intel vs. AMD in the Microprocessor market
- The local cable company vs. the local telephone company in residential broadband Internet access
- Wal-Mart vs K-Mart in the American superstore market.
- The Home Depot and Lowes in the American retail home improvement market.
- Vodafone vs. Mobinil in the Egyptian mobile market
- Telecom vs. Vodafone in the New Zealand mobile market
- Kodak vs. Fujifilm in motion picture film stock market
- K-Kauppa vs. S-Group in the Finnish supermarket market (joinly they control 75% of supermarket market)
- Foodstuffs and Progressive Enterprises in the New Zealand supermarket market (joinly they control 90% of supermarket market)
- NVIDIA vs ATI in the mainstream Graphics card market.
- Borders vs. Barnes & Noble in the Bookstore market.
- LexisNexis vs. Westlaw in legal research; the two companies together have been jokingly referred to as Wexis
[edit] Broadcasting
Duopoly is also used in the broadcast television and radio industry, referring to a single company owning two outlets in the same city. This usage is technically incompatible with the definition of the word, inasmuch as there are generally more than two owners of broadcast television stations markets with duopolies. 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".
Duopolies were not allowed in the United States until 2001. The Federal Communications Commission allows common ownership of two stations in a single market with two conditions:
- There must be at least eight unique station owners left in the market once a duopoly is formed. In effect, duopolies are not allowed in any market with fewer than nine full-power stations (counting noncommercial stations).
- Two of the four highest-rated stations in a market cannot be owned by the same person.
There are at least two cases where a company has been accused of having duopolies where they aren't legally permitted by using shell corporations to control a second station in a market.
- Sinclair Broadcast Group controls the operations of all six stations owned by Cunningham Broadcasting through local marketing agreements. However, nearly all of Cunningham's stock is held by trusts in the name of Sinclair's founders and owners, the Smith family. In three markets, Cunningham owns the fourth-highest rated station while Sinclair owns one of the three highest-rated stations. In the three other markets, there are too few stations or unique owners to legally permit a duopoly.
- Malara Broadcasting owns two stations--WPTA-TV in Fort Wayne, Indiana and KDLH-TV in Duluth, Minnesota. Both stations' operations are controlled by Granite Broadcasting, which owns WISE-TV in Fort Wayne and KBJR-TV in Duluth. Malara files its Securities and Exchange Commission reports jointly with Granite, leading to allegations that Malara is simply a shell for Granite. Neither Fort Wayne nor Duluth have enough stations to legally permit a duopoly.
See also concentration of media ownership.
[edit] Examples in American television
- Cleveland: WOIO-CBS 19 and WUAB-MNTV 43 (Raycom Media)
- Dayton, Ohio: WKEF-ABC 22 (Sinclair Broadcast Group) and WRGT-TV-Fox 45 Cunningham Broadcasting effectively a Sinclair duopoly in violation of FCC rules
- Buffalo, New York: WIVB-TV-CBS 4 and WNLO-The CW (LIN TV); WUTV-FOX 29 and WNYO-MNTV] (Sinclair Broadcast Group)
- Hartford, Connecticut: WTNH-TV- ABC 8 and WCTX-MNTV 59 (LIN TV); and WTIC-TV-Fox 61 and WTXX-The CW
- Raleigh-Durham, North Carolina: WRAL-TV-CBS 5 and WRAZ-FOX 50 (Capitol Broadcasting); WLFL-The CW 22 and WRDC-MNTV 28 (Sinclair Broadcast Group)
- Washington, DC: WTTG-FOX 5 and WDCA-MNTV 20 (Fox Television Stations Group)
- New Orleans: WNOL-The CW 38 and WGNO ABC 26 (Tribune Broadcasting)
- Norfolk: WAVY-TV-NBC 10 and WVBT FOX 43 (LIN TV)
- New York City, New York: WWOR-TV - MNTV 9 and WNYW - Fox 5 (Fox Television Stations Group)
- Boston: WBZ-TV-CBS 4 and WSBK-TV- IND (CBS Corporation)
- Boston, Massachusetts: WHDH-TV-NBC 7 and WLVI-TV- The CW 56 (Sunbeam Television)
- Minneapolis-St. Paul: KSTP-TV-ABC 5 and KSTC-TV-IND 45 (Hubbard Broadcasting); KMSP-TV 9 FOX and WFTC 29 MNTV (Fox Television Stations Group
- Denver: KUSA-TV - NBC 9 and KTVD MNTV 20 (Gannett)
- Los Angeles: KCBS-TV CBS and KCAL IND 9 (CBS Corporation), KNBC- NBC 4 and KVEA - TEL 52 (NBC Universal); and KTTV FOX and KCOP (Fox Television Stations Group)
- Chicago: WFLD - FOX 32 and WPWR MNTV 50 (Fox Television Stations Group)
- Little Rock, Arkansas: KLRT-TV - Fox 16 and KASN - The CW 38 (Clear Channel Communications (sale Pending))
- Duluth, Minnesota: KBJR-TV - NBC 6 (Granite Broadcasting) and KDLH-TV - CBS 3 (Malara Broadcasting) possibly a Granite duopoly in violation of FCC rules
- Sacramento, California: KOVR-CBS 13 and KMAX-TV-The CW 13 (CBS Corporation)
A special case is Salt Lake City. The NBC affiliate KSL-TV is owned by Bonneville International, and a PBS station, KBYU-TV, is owned by BYU. Bonneville is owned by the Deseret Management Corporation, a for-profit arm of The Church of Jesus Christ of Latter-day Saints; BYU is directly owned by the LDS Church. While Deseret and BYU are separate entities, the fact that both are owned by the LDS Church makes them a duopoly in a sense.
