What Is a Duopoly?

Duopoly is a form of oligopoly with only two competitors in the market. In fact, generally two major competitors rule the market. Duopoly refers to a market type in which there are only two sellers (or two manufacturers) in an industry, also known as "bilateral monopoly". The important feature of the duopoly is that these two manufacturers are independent of each other, and a manufacturer that adjusts its output or price will inevitably cause market changes, that is, affect the sales of the opponent, and thus cause the reaction of the opponent. The vendor making the adjustment. The prices of manufacturers under the duopoly are mainly to reach an agreement or tacit understanding with each other in order to set a common price, limit production or divide the market.

Duopoly

German economist Steinberger proposed a dynamic model of duopoly in 1934, in which one dominates the enterprise (leader) to act first, then followers to act. For example, GM has played such a leadership role at certain stages in the history of the American automotive industry. As a follower of a company, such as

Since the monopolist is the sole seller of the products it produces, it faces the entire market directly, in other words, it will face downwardly sloping market demand. The large number of buyers is therefore competitive, that is, the buyers are

Hypothesis of the duopoly model

Suppose that two companies A and B sell the same product in the same market-bottled pure water. Two enterprises

With the increasing contribution of innovative technologies to economic development, the theoretical research on the licensing of innovative technologies has made great progress. The holders of innovative technology are divided into manufacturer innovators and independent innovators. Kamien and Tauman (1986), Katz and Shapiro (1986) study as independent innovators; and Wang (1998), Wang (2002) study as manufacturer innovators. This article compares the royalty concession strategies and innovation incentives of technology innovation vendors in the downstream synchronous mobile Cournot competitive market structure.

The profitable telecommunications sector has long been a monopoly industry. However, China Unicom, which is increasingly capable, has challenged China Telecom's dominance, indicating that the government has allowed the telecommunications sector to enter a pattern of at least a duopoly.

Short-term equilibrium conditions in a monopolistic competitive market

In 1994, China Unicom's initial business was limited to the field of mobile communication services. It raised funds from telecommunications equipment and operating companies in western countries and built mobile communication networks in 20 cities. As the telecommunications industry has been identified as a strategic economic sector, China has banned foreign companies from directly investing in telecommunications businesses. However, according to the Chinese-Chinese-foreign investment method, a foreign company can first establish a joint venture with a Chinese partner, and then this enterprise can then establish a joint venture with China Unicom. In this way, they are allowed to obtain a part of their operating income (although they have to go through the transfer procedure), so they are considered the only way to enter the Chinese market.

Until 1998, China Unicom's business developed steadily, but a series of changes occurred at the same time, which hindered China Unicom's development plan: The Ministry of Information Industry stipulated that China's mobile phones use the GSM standard (which has been adopted in domestic telecommunications network construction). This is a blow to China Unicom's GSM-opposed CDM technology, which is the main purpose of American investors. In late 1998, Wu Jichuan propagated that China-China-foreign investment was illegal. This affected more than 40 foreign investors of China Unicom, with a total investment of 1.4 billion US dollars, accounting for more than three-quarters of China Unicom's capital.

Some changes in recent months have enhanced China Unicom's competitiveness, but so far it has not posed a profound threat to China Telecom: mobile communication technology. China Unicom was initially committed to the introduction of CDMA, but conflicted with the Ministry of Information Industry's intention to focus on the development of GSM technology. As the third-generation (3G) mobile communication technology will be adopted soon, and it is no longer meaningful to build the first-generation CDMA network, China Unicom announced in June that it will no longer adopt CDMA, which saved a huge capital expenditure. . In addition, it is likely to adopt 3G new technology TD-SCDMA.

The role of wired communications. The current government regulations prohibit cable communication companies from bundling telephone, Internet access and cable TV services to form a package of services for consumers (except Shanghai). However, it is estimated that these regulations will soon be revised to allow the wired network to open up another way for China Telecom to enter the "last section of the line" in residents' homes.

Although the Ministry of Information Industry allowed China Unicom to expand its scope of functions this year, it is still considering whether it is necessary to coordinate the use of competition and to encourage and improve the country's telecommunications infrastructure by protecting the interests of China Telecom, because most of the investment required also depends on China Telecom. Income. For example: 1. The reduction of profitable mobile communications and international long-distance calls has harmed China Telecom's toll revenue. It is estimated that the latest reduction of long-distance tolls has reduced its annual revenue by more than $ 4 billion. As new users start to decrease and competition from China Unicom appears, its revenue will continue to decrease. To solve this problem, the Ministry of Information Industry is implementing a nationwide regulation that stipulates that all communication companies must bear the cost of expanding telephone services to poor areas. 2. Since China Telecom's mobile communication business changed production last year, it has been excluded from the mobile communication market. But last week it was reported that the Ministry of Information Industry intends to return the company to the mobile communications sector before allowing the company to list in Hong Kong next year.

Conclusion: Recent changes suggest that the Ministry of Information Industry is ready to help China Unicom and China Telecom form a dual monopoly. However, it will continue to prevent further competition until China Telecom has sufficient commercial capacity to meet the challenges in the future.