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Path dependence
Path dependence is a concept in the social sciences, referring to processes where past events or decisions constrain later events or decisions. It can be used to refer to outcomes at a single point in time or to long-run equilibria of a process. Path dependence has been used to describe institutions, technical standards, patterns of economic or social development, organizational behavior, and more.
In common usage, the phrase can imply two types of claims. The first is the broad concept that "history matters", often articulated to challenge explanations that pay insufficient attention to historical factors. This claim can be formulated simply as "the future development of an economic system is affected by the path it has traced out in the past" or "particular events in the past can have crucial effects in the future." The second is a more specific claim about how past events or decisions affect future events or decisions in significant or disproportionate ways, through mechanisms such as increasing returns, positive feedback effects, or other mechanisms.
The videotape format war is a key example of path dependence. Three mechanisms independent of product quality could explain how VHS achieved dominance over Betamax from a negligible early adoption lead:
An alternative analysis is that VHS was better-adapted to market demands (e.g. having a longer recording time). In this interpretation, path dependence had little to do with VHS's success, which would have occurred even if Betamax had established an early lead.
The QWERTY keyboard is a prominent example of path dependence due to the widespread emergence and persistence of the QWERTY keyboard. QWERTY has persisted over time despite potentially more efficient keyboard arrangements being developed – QWERTY vs. Dvorak is an example of this. However, as it is not clear whether other keyboard layouts really are better, there is still debate if this is a good example of path dependence.
The standard gauge of railway tracks is another example of path dependence which explains how a seemingly insignificant event or circumstance can change the choice of technology over the long run despite contemporary know-how showing such a choice to be inefficient.
More than half the world's railway gauges are 4 feet 8+1⁄2 inches (143.5 cm), known as standard gauge, despite the consensus among engineers being that wider gauges have increased performance[clarification needed] and speed. The path to the adoption of the standard gauge began in the late 1820s when George Stephenson, a British engineer, began work on the Liverpool and Manchester Railway. His experience with primitive coal tramways resulted in this gauge width being copied by the Liverpool and Manchester Railway, then the rest of Great Britain, and finally by railroads in Europe and North America.
There are tradeoffs involved in the choice of rail gauge between the cost of constructing a line (which rises with wider gauges) and various performance metrics, including maximum speed, low center of gravity (desirable, especially in double-stack rail transport). While the attempts with Brunel gauge, a significantly broader gauge failed, the widespread use of Iberian gauge, Russian gauge and Indian gauge, all of which are broader than Stephenson's choice, show that there is nothing inherent to the 1435 mm gauge that led to its global success.
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Path dependence
Path dependence is a concept in the social sciences, referring to processes where past events or decisions constrain later events or decisions. It can be used to refer to outcomes at a single point in time or to long-run equilibria of a process. Path dependence has been used to describe institutions, technical standards, patterns of economic or social development, organizational behavior, and more.
In common usage, the phrase can imply two types of claims. The first is the broad concept that "history matters", often articulated to challenge explanations that pay insufficient attention to historical factors. This claim can be formulated simply as "the future development of an economic system is affected by the path it has traced out in the past" or "particular events in the past can have crucial effects in the future." The second is a more specific claim about how past events or decisions affect future events or decisions in significant or disproportionate ways, through mechanisms such as increasing returns, positive feedback effects, or other mechanisms.
The videotape format war is a key example of path dependence. Three mechanisms independent of product quality could explain how VHS achieved dominance over Betamax from a negligible early adoption lead:
An alternative analysis is that VHS was better-adapted to market demands (e.g. having a longer recording time). In this interpretation, path dependence had little to do with VHS's success, which would have occurred even if Betamax had established an early lead.
The QWERTY keyboard is a prominent example of path dependence due to the widespread emergence and persistence of the QWERTY keyboard. QWERTY has persisted over time despite potentially more efficient keyboard arrangements being developed – QWERTY vs. Dvorak is an example of this. However, as it is not clear whether other keyboard layouts really are better, there is still debate if this is a good example of path dependence.
The standard gauge of railway tracks is another example of path dependence which explains how a seemingly insignificant event or circumstance can change the choice of technology over the long run despite contemporary know-how showing such a choice to be inefficient.
More than half the world's railway gauges are 4 feet 8+1⁄2 inches (143.5 cm), known as standard gauge, despite the consensus among engineers being that wider gauges have increased performance[clarification needed] and speed. The path to the adoption of the standard gauge began in the late 1820s when George Stephenson, a British engineer, began work on the Liverpool and Manchester Railway. His experience with primitive coal tramways resulted in this gauge width being copied by the Liverpool and Manchester Railway, then the rest of Great Britain, and finally by railroads in Europe and North America.
There are tradeoffs involved in the choice of rail gauge between the cost of constructing a line (which rises with wider gauges) and various performance metrics, including maximum speed, low center of gravity (desirable, especially in double-stack rail transport). While the attempts with Brunel gauge, a significantly broader gauge failed, the widespread use of Iberian gauge, Russian gauge and Indian gauge, all of which are broader than Stephenson's choice, show that there is nothing inherent to the 1435 mm gauge that led to its global success.