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What do we know about duopolies? Insights from the history of cellular phones

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  • Garcia-Vicente, Nicolas
  • Garcia-Swartz, Daniel D.
  • Campbell-Kelly, Martin

Abstract

The theoretical literature on duopolies—the Bertrand and Cournot models and their variants—generates a range of predictions for equilibrium prices and quantities depending on assumptions. Here we compare behavior in cellular-network services across countries in the 1980s and early 1990s. We study transitions from monopoly to duopoly and from duopoly to oligopoly with more than two competitors. Through comparisons across countries and time periods, we isolate factors that explain why duopolistic competition had a larger impact on prices in certain markets than in others. Among other things, we find that two institutional factors played an important role: the way beauty contests for additional licenses were designed and whether duopolists expected additional entry into the network-services market or not.

Suggested Citation

  • Garcia-Vicente, Nicolas & Garcia-Swartz, Daniel D. & Campbell-Kelly, Martin, 2022. "What do we know about duopolies? Insights from the history of cellular phones," Telecommunications Policy, Elsevier, vol. 46(2).
    • Handle: RePEc:eee:telpol:v:46:y:2022:i:2:s0308596121001634
    DOI: 10.1016/j.telpol.2021.102259
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    References listed on IDEAS

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    More about this item

    Keywords

    Duopoly; Cellular network services; Cross-country comparisons;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative

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