What does duopsony mean?
Duopsony is an economic condition in which only two buyers purchase a good or service, concentrating bargaining power in their hands. Sellers may consequently have difficulty obtaining favourable prices or conditions, particularly when the buyers account for most or all of the demand. The term is used most often in labour economics, where two large employers may exert substantial influence over wages and working conditions. It is a specific form of oligopsony, the broader condition in which a small number of buyers face many sellers. Duopsony should not be confused with a duopoly, which concerns two sellers rather than two buyers. Although the word is uncommon outside technical discussion, it identifies a useful market structure in which otherwise separate sellers collectively depend on very few purchasers. It is especially relevant to analyses of monopsonistic employers, regional labour markets, agricultural markets, and industries in which a few firms dominate demand.
nounAn economic market structure in which there are only two buyers of a good or service, typically labour. Sellers face concentrated buyer power and may have little scope to resist the buyers' terms.
- A market structure in which only two buyers purchase a good or service, giving those buyers concentrated bargaining power over sellers.
"With only two factories purchasing the region's agricultural output, farmers faced a duopsony and accepted depressed prices."
"With only two factories purchasing the region's agricultural output, farmers faced a duopsony and accepted depressed prices."
"The report argues that the hospital trust's dominance creates duopsony in the local market for specialist nurses."
The plural is used when referring to more than one market structure exhibiting this condition.
"The study identifies duopsonies in several remote labour markets."
Duopsony is the buyer-side mirror image of a duopoly: instead of two sellers facing many buyers, two buyers face many sellers.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does duopsony come from?
The word is a Latinized formation combining Greek duo, meaning "two," with opsōnia, meaning "buying." The second element also underlies related terms such as monopsony, oligopsony, and opsomania, while numerical prefixes distinguish different concentrations of buyer power.
Related word forms
How duopsony is actually used
This is a specialist term in economics and industrial organization, especially used in discussions of labour markets. It is formal and analytical; in general prose, the phrase "two-buyer market" may be clearer.
Easily confused with duopsony
A duopsony is a market with two buyers, whereas a duopoly is a market with two sellers.