Duopoly and competition - The case of American cellular telephone

The designation of local duopoly market structure for the American cellular telephone industry offers an unusual opportunity to observe the relationship of duopoly and market performance, A study of the first 28 markets to offer cellular service in the United States found that forms of competitive behaviour were evident in every market, but the intensity of competition varied widely. In nearly every market, prices declined during the six-year period. Although duopoly appears to have facilitated price competition, the wide variation in performance from market to market indicates that factors other than market structure strongly influence the behaviour of the firm, (C) 1998 Elsevier Science Ltd. All rights reserved.