Duopolies

A duopoly is a market situation where only two companies dominate the industry, competing against each other. Each company's decisions, such as pricing or product offerings, directly affect the other’s outcomes, leading to strategic interactions. This close rivalry can influence market prices, innovation, and consumer choices. Like two players in a game, each firm must anticipate the other's moves to maximize its own success. Duopolies are common in markets with high barriers to entry or specialized products, where only two firms can effectively compete and sustain their positions.