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Flexible vs Dedicated Technology Adoption in the Presence of a Public Firm
(2006)
  • Maria Jose Jose Gil Molto, University of Leicester
  • Joanna Poyago-Theotoky, Loughborough University
Abstract

We study firms' adoption of flexible versus dedicated technologies in the context of a mixed versus a private duopoly with product differentiation. The 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 either almost independent products or products that are close substitutes. Privatization of the public firm is socially beneficial only in limited circumstances.

Publication Date
2006
Citation Information
Maria Jose Jose Gil Molto and Joanna Poyago-Theotoky. "Flexible vs Dedicated Technology Adoption in the Presence of a Public Firm" (2006)
Available at: http://works.bepress.com/joanna_poyago_theotoky/8/