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Article
Flexible versus Dedicated Technology Adoption in the Presence of a Public Firm
Southern Economic Journal (2008)
  • Maria Jose Gil-Molto, University of Leicester
  • Joanna Poyago-Theotoky, Loughborough University
Abstract

We study firms' adoption of flexible technologies in the context of a mixed versus a private duopoly with product differentiation. As opposed to a dedicated technology, a flexible technology allows a firm to become multiproduct or multimarket without bearing additional costs. We find that a configuration where both firms adopt flexible technologies is more likely to arise in equilibrium in the private duopoly. A similar result occurs when both firms use a dedicated technology in the case of almost independent or close substitute products. Privatization of the public firm is socially beneficial in limited circumstances.

Publication Date
2008
Citation Information
Maria Jose Gil-Molto and Joanna Poyago-Theotoky. "Flexible versus Dedicated Technology Adoption in the Presence of a Public Firm" Southern Economic Journal Vol. 74 Iss. 4 (2008)
Available at: http://works.bepress.com/joanna_poyago_theotoky/4/