Better Observability Promotes the Adoption of more Flexible Technologies
We study in this paper how the technological flexibility choices and equilibrium configurations depend first on the industry characteristics (demand function and cost parameters specific to the multiproduct flexible technology and to the product dedicated technologies) and, second, on the observability conditions prevailing in the industry. We show that better observability tends to promote the adoption of more flexible technologies.
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- Eaton, B Curtis & Schmitt, Nicolas, 1994.
"Flexible Manufacturing and Market Structure,"
American Economic Review,
American Economic Association, vol. 84(4), pages 875-888, September.
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