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| Author: | Röller, L-H. Tombak, M. M. |
| Title: | Strategic choice of flexible production technologies and welfare implications. |
| Journal: | Journal of Industrial Economics
1990 : JUN, VOL. 38:4, p. 417-431 |
| Index terms: | PRODUCTION MANAGEMENT MANUFACTURING TECHNOLOGY ECONOMETRIC MODELS EQUILIBRIUM THEORY |
| Language: | eng |
| Abstract: | The strategic implications of production technology choice are analyzed in a game theoretic setting. The market conditions under which firms would choose a more flexible production technology with respect to product design are described. A two-stage game is used in which firms choose between flexible and less flexible production technologies in the first stage and subsequently choose output. It was found that consumers would benefit from the introduction of flexible technologies. It was also found that the production technology game is a Prisoner's Dilemma when firms invest in flexible manufacturing system. The conditions under which the resulting equilibria are efficient are derived. |
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