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Path Dependence: Determinants and Impacts of Technology Adoption

Author

Listed:
  • Simeon Simeonov

    (University of World and National Economy, Sofia, Bulgaria)

Abstract

Today’s world heavily relies on sustained technological advancements. Yet, consumers’ preferences for one technology over another are not necessarily predicated on transparent or rational reasons. That is, in a sequence of events later decisions are not entirely independent on previous ones. Historical choice patterns paired with positive feedback may subsequently reinforce one’s entrenched ways of thinking. This resultant contingency, referred to as path dependence, may tip the balance in favor of one particular piece of technology over more superior ones. A better comprehension of the phenomena in terms of technology adoption suggests a greater probability of attaining the most optimal outcome. Thereby, the current paper aims to address the subtle corresponding determinants and impacts of technology adoption. Relevant studies thereat were selected, critically assessed, and integrated into the follow-up literature review. A thorough view at the inferior QWERTY keyboard attributed its entrenchment on a market level to three interrelated factors: technical interrelatedness, system scale economies, and quasi-irreversibility of investment. Although more superior alternatives were available, the QWERTY keyboard layout is nowadays a leading standard worldwide.

Suggested Citation

  • Simeon Simeonov, 2020. "Path Dependence: Determinants and Impacts of Technology Adoption," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 300-310, June.
    • Handle: RePEc:nwe:eajour:y:2020:i:2:p:300-310
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    File URL: https://www.unwe.bg/doi/eajournal/2020.2/EA.2020.2.07.pdf
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    References listed on IDEAS

    as
    1. Bernhard Ebbinghaus, 2009. "Can Path Dependence Explain Institutional Change? Two Approaches Applied to Welfare State Reform," Chapters, in: Lars Magnusson & Jan Ottosson (ed.), The Evolution of Path Dependence, chapter 8, Edward Elgar Publishing.
    2. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    3. Carolina Castaldi & Giovanni Dosi & Evita Paraskevopoulou, 2011. "Path dependence in technologies and organizations: a concise guide," LEM Papers Series 2011/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Liebowitz, S J & Margolis, Stephen E, 1995. "Path Dependence, Lock-in, and History," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 205-226, April.
    5. Benjamin Krischan Schulte, 2015. "Theoretical Foundation – Path Dependence, Consumer Behavior, and Service Relationship Research," Springer Books, in: Staying the Consumption Course, edition 127, chapter 2, pages 7-65, Springer.
    6. Benjamin Krischan Schulte, 2015. "Staying the Consumption Course," Springer Books, Springer, edition 127, number 978-3-658-08788-3, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    path dependence; technology adoption; initial conditions; positive feedback; QWERTY keyboard;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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