The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • James W. Friedman
Reference work entry


A duopoly is a market in which two firms sell a product to a large number of consumers. Each consumer is too small to affect the market price for the product: that is, on the buyers’ side, the market is competitive. Therefore, in its essence duopoly is a two player variable sum game. Each of the two duopolists is a rational decision-maker whose actions will affect both himself and his rival. Although the interests of the duopolists are intertwined, they are not wholly coincident nor wholly in conflict. In contrast to the agents in competitive markets, the duopolists must each concern themselves with what the other duopolist is likely to do.

This is a preview of subscription content, log in to check access.


  1. Bertrand, J. 1883. Review of Cournot 1838. Journal des Savants 499–508.Google Scholar
  2. Bowley, A. 1924. The mathematical groundwork of economics. New York: Kelley, 1965.Google Scholar
  3. Bowley, A. 1928. Bilateral monopoly. Economic Journal 38: 651–659.CrossRefGoogle Scholar
  4. Chamberlin, E. 1933. The theory of monopolistic competition, 7th ed. Cambridge: Harvard, 1956.Google Scholar
  5. Cournot, A. 1838. Recherches sur les principes mathématiques de la théorie des richesses. Trans. N.T. Bacon. New York: Macmillan, 1927.Google Scholar
  6. Edgeworth, F. 1897. The pure theory of monopoly. Papers Relating to Political Economy I: 111–142.Google Scholar
  7. Edgeworth, F. 1925. Papers relating to political economy. New York: Burt Franklin, 1970.Google Scholar
  8. Friedman, J. 1968. Reaction functions and the theory of duopoly. Review of Economic Studies 35: 257–272.CrossRefGoogle Scholar
  9. Friedman, J. 1983. Oligopoly theory. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  10. Friedman, J. 1986. Game theory with applications to economics. New York: Oxford University Press.Google Scholar
  11. Frisch, R. 1933. Monopole – polypole – la notion de force dans l’économie. Festschrift til Harald Westergaard. Supplement to Nationalekonomisk Tidsskrift.Google Scholar
  12. Hotelling, H. 1929. Stability in competition. Economic Journal 39: 41–57.CrossRefGoogle Scholar
  13. Lancaster, K. 1979. Variety, equity, and efficiency. New York: Columbia University Press.Google Scholar
  14. Nash, J. 1951. Noncooperative games. Annals of Mathematics 45: 286–295.CrossRefGoogle Scholar
  15. Owen, G. 1968. Game theory, 2nd ed. New York: Academic, 1982.Google Scholar
  16. Selten, R. 1975. Reexamination of the perfectness concept for equilibrium points in extensive games. International Journal of Games Theory 4: 25–55.CrossRefGoogle Scholar
  17. Smith, A. 1776. In An inquiry into the nature and causes of the wealth of nations, ed. R.H. Campbell, A.S. Skinner, and W.M. Todd. Oxford: Clarendon Press, 1976.CrossRefGoogle Scholar
  18. von Stackelberg, H. 1934. Marktform und Gleichgewicht. Vienna: Julius Springer.Google Scholar
  19. Wicksell, K. 1925. Mathematical economics. In K. Wicksell, Selected papers on economic theory, ed. Erik Lindahl. Cambridge, MA: Harvard University Press, 1958.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • James W. Friedman
    • 1
  1. 1.