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

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  • María José Gil‐Moltó
  • Joanna Poyago‐Theotoky

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.

Suggested Citation

  • María José Gil‐Moltó & Joanna Poyago‐Theotoky, 2008. "Flexible versus Dedicated Technology Adoption in the Presence of a Public Firm," Southern Economic Journal, John Wiley & Sons, vol. 74(4), pages 997-1016, April.
  • Handle: RePEc:wly:soecon:v:74:y:2008:i:4:p:997-1016
    DOI: 10.1002/j.2325-8012.2008.tb00877.x
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    References listed on IDEAS

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    Cited by:

    1. Armel Jacques, 2022. "Endogenous timing of technological choices of flexibility in a mixed duopoly," TEPP Working Paper 2022-04, TEPP.

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