08

Path dependence refers to the contingent selection of a stable equilibrium in a sequential stochastic process that is non-ergodic

Pfadabhängigkeit bezieht sich auf die zufällige Auswahl eines stabilen Gleichgewichts in einem sequentiellen stochastischen Prozess, der nicht ergodisch ist

• Initial conditions affects the development and final outcome of the process (equilibrium)

• Small events affects the development and final outcome of the process

  • Small events are random and exogenous

  • The sequence of small events matters

• Technological lock in results from a process in which a technology prevails over another —> equilibrium

• Absence of external shocks and self-reinforcing learning loops —> Equilibrium is persistant

• Additionally:

  • Switching technology

    • —> cognitive sunk costs

  • Positive network externalities (positive feedback) coming from the usage of a technology —>

    • Technical interrelatedness

    • Increasing returns

    • Quasi-irreversibility

• Strategic Niche Management is a strategy to

  • introduce and protect innovative technologies from competition,

  • enabling changes in the socio-technical regime of an economy

• Technological niches are spaces where new technologies are tested for

  • compatibility.

  • market demand,

  • societal issues,

  • —> facilitating the development of proto-markets

• Path dependence: Paths are dependent on random, stochastic events

• Path creation: Paths are created and designed through agents’ intentionality

  
  

  —> Path dependency and path creation differ in their conception of path constitution

What the observer thinks about the nature of an event is not necessarily correct because of his “limited discerning power”