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Title: Flexible vs dedicated technology adoption in the presence of a public firm
Authors: Gil-Molto, Maria Jose
Poyago-Theotoky, Joanna
Keywords: Flexible technology
Privatization
Public firm
Mixed duopoly
Issue Date: 2006
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.
Description: This is part of an Economics Discussion Paper Series. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2006_1.html.
URI: https://dspace.lboro.ac.uk/2134/814
Appears in Collections:Working Papers (Economics)

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