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RSSOligarchy + Monopoly ≠ Oligopoly
I’ve long been aware of the words oligarchy and monopoly, but I’ve only just discovered the word oligopoly.
The word oligarchy describes a type of government:
government by the few. from oligoi “few, small, little” plus arkhein “to rule.”
The word monopoly describes a type of market paradigm:
exclusive control of a commodity or trade, from monos- “single, alone + polein “to sell.
The word oligopoly, like monopoly, is a term used in economics:
oligopoly [(ŏl'ĭ-gŏp'ə-lē] – a market situation in which each of a limited number of producers is strong enough to influence the market but not strong enough to disregard the reaction of his competitors
Here it is in some headlines:
Nonlinear pricing in an oligopoly market: the case of specialty coffee–RAND Journal of Economics
‘Market Economy’ or Oligopoly-Finance Capitalism? –Monthly Review, Senegal, Africa
An oligopoly model of commercial fishing–Seoul Journal of Economics
Oracle president backpedals on ‘oligopoly’ report –CNET News
There’s also a word for a market situation in which two competing sellers hold the controlling power of determining the amount and price of a product or service offered to a large number of buyers: duopoly.
Monopoly, duopoly and oligopoly, which refer to the control exercised by sellers, have these corresponding forms to describe the role of buyers:
monopsony – a market situation in which there is a single buyer for a given product or service from a large number of sellers
duopsony a market situation in which two rival buyers hold the controlling power of determining the demand for a product or service from a large number of sellers
oligopsony – a market situation in which each of a limited number of buyers is strong enough to influence the market but not strong enough to ignore the reaction to such influence by his competitors
The suffix -opsony in these words derives from Greek opsonia, “purchase of victuals, catering.”
I don’t know where you’ll find a use for these words, but I think they’re cool.
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I heard monopsony for the first time on the NPR Planet Money podcast. An economist referred to negotiations with somali pirates as a “monopolist / monopsonist problem”. A situation where there is one buyer and one seller. This is interesting to economists because there is no market to set the price.
Being a student of economics, allow me to add: oligopoly leads to the formation of cartels and groups that tend to formulate a kind of unified monopoly to corner the market paradigm…
Like the corner with three gas stations…
The word monopoly describes a type of market paradigm
In the sense it’s usually used, it describes a non-market paradigm. Rothbard proved that monopoly (in the sense usually meant; i.e., where the monopolist can increase his selling price without suffering losses. In the literal sense, pretty much every seller is a monopolist: Nike is only seller of Nike-brand shoes, etc.) is impossible in a free market. Monopoly can only be a result of legislation, not markets.