Flexible vs Dedicated Technology Adoption in the Presence of a Public Firm

Maria Jose Gil-Molto () and Joanna Poyago-Theotoky
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Maria Jose Gil-Molto: Dept of Economics, Loughborough University
Authors registered in the RePEc Author Service: Maria Jose Gil Molto

Discussion Paper Series from Department of Economics, 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.

Keywords: Flexible Technology; Privatization; Public Firm; Mixed Duopoly. (search for similar items in EconPapers)
JEL-codes: L13 L32 L33 O33 (search for similar items in EconPapers)
Date: 2006-01, Revised 2006-01
New Economics Papers: this item is included in nep-ino and nep-tid
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