Hey there, it's Stephen Dubner. I know how much you all love the American political system,

which delivers nothing but excellence, efficiency and compassion to all of us. Still, we thought

it might be useful to look under the hood to see if our two-party system is really as

awesome as we all think it is. This episode first ran in 2018, but it's probably even more relevant

today. It's called America's Hidden Duopoly. Imagine a gigantic industry, it's being dominated

by just one or two companies. Actually, you don't have to imagine. Google has more than 90% of the

global search engine market. So, not quite a monopoly, but pretty close. Such cases are rare, but not

so rare is the duopoly when two firms dominate an industry, like Intel and AMD and computer processors,

Boeing and Airbus and Jet Airliners, the sharks and the jets and the fictional gangs from the 50s

industry. But surely, the most famous duopoly is this one. People who think young say Pepsi, please.

The rivalry between Coca-Cola and Pepsi-Cola goes back to the 19th century. Coke was long

dominant, but in the 1970s and 80s Pepsi gained ground and marketed hard to younger consumers.

Coke's internal research found that most people, even Coke employees, preferred Pepsi. In 1985,

they abandoned their classic recipe in favor of New Coke, which tasted more like Pepsi. This

did not work out so well. I'm Don Kio, president of the Coca-Cola company. When we brought you the

new taste of Coke, we knew that millions would prefer it and millions do. What we didn't know was

how many thousands of you would phone and write asking us to bring back the classic taste of

original Coca-Cola. Coke eventually got rid of New Coke altogether. And, despite the flip flop,

or maybe because of it and the attendant-free media, in any case, Coke regained the top spot.

Today, even as soda consumption falls, the rivalry rages on, with both companies adding juices,

teas, and waters to their portfolios. You can afford to make those big acquisitions when you've

got a ton of cash on hand, when you're one of just two companies sharing a huge market.

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