Path dependence

Path dependence is a concept in the social sciences, referring to processes where past events or decisions constrain later events or decisions.^[1]^[2] It can be used to refer to outcomes at a single point in time or to long-run equilibria of a process.^[3] Path dependence has been used to describe institutions, technical standards, patterns of economic or social development, organizational behavior, and more.^[4]^[1]

This article is about path dependence in economics and social sciences. For a similar topic in physics, see Path dependence (physics).

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.^[1]^[5]^[6] 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"^[7] or "particular events in the past can have crucial effects in the future."^[1] 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.^[1]^[2]^[3]^[5]

Commercial examples[edit]

Videocassette recording systems[edit]

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:

Durability of capital equipment

Technical interrelatedness

Increasing returns

Dynamic increasing returns to adoption

[29]

One is the framework, most notably utilized by Ruth and David Collier in political science. In the critical juncture, antecedent conditions allow contingent choices that set a specific trajectory of institutional development and consolidation that is difficult to reverse. As in economics, the generic drivers are: lock-in, positive feedback, increasing returns (the more a choice is made, the bigger its benefits), and self-reinforcement (which creates forces sustaining the decision).^[30]

critical juncture

The other path-dependent process deals with reactive sequences where a primary event sets off a temporally-linked and causally-tight chain of events that is nearly uninterruptible. These reactive sequences have been used to link such things as the assassination of Martin Luther King Jr. with welfare expansion, or the industrial revolution in England with the development of the steam engine.

deterministic

typography

is considered by some to be path-dependent and historically contingent: mutations occurring in the past have had long-term effects on current life forms, some of which may no longer be adaptive to current conditions. For instance, there is a controversy about whether the panda's thumb is a leftover trait or not.

Evolution

In the and software markets, legacy systems indicate path dependence: customers' needs in the present market often include the ability to read data or run programs from past generations of products. Thus, for instance, a customer may need not merely the best available word processor, but rather the best available word processor that can read Microsoft Word files. Such limitations in compatibility contribute to lock-in, and more subtly, to design compromises for independently developed products, if they attempt to be compatible. Also see embrace, extend and extinguish.

computer

In socioeconomic systems, commercial fisheries' harvest rates and conservation consequences are found to be path dependent as predicted by the interaction between slow institutional adaptation, fast ecological dynamics, and diminishing returns.

[35]

In physics and mathematics, a is a physical system in which the states depend on the physical paths taken.^[36]

non-holonomic system

Critical juncture theory

Imprinting (organizational theory)

Innovation butterfly

Historicism

Network effect

Opportunity cost

Ratchet effect

Tyranny of small decisions

Arrow, Kenneth J. (1963), 2nd ed. . Yale University Press, New Haven, pp. 119–120 (constitutional transitivity as alternative to path dependence on the status quo).

Social Choice and Individual Values

Arthur, W. Brian (1994), Increasing Returns and Path Dependence in the Economy. University of Michigan Press.

Boas, Taylor C (2007). (PDF). Journal of Theoretical Politics. 19 (1): 33–54. CiteSeerX 10.1.1.466.8147. doi:10.1177/0951629807071016. S2CID 11323786. Archived from the original (PDF) on 2008-09-05. Retrieved 2007-10-20.

"Conceptualizing Continuity and Change: The Composite-Standard Model of Path Dependence"

Collier, Ruth Berins; (1991). Shaping the Political Arena: Critical Junctures, the Labor Movement, and Regime Dynamics in Latin America. Princeton: Princeton University Press. ISBN 9780268077105. Retrieved 6 July 2018.

Collier, David

David, Paul A. (June 2000). (PDF). Archived from the original (PDF) on 2014-03-24., in P. Garrouste and S. Ioannides (eds), Evolution and Path Dependence in Economic Ideas: Past and Present, Edward Elgar Publishing, Cheltenham, England.

"Path dependence, its critics and the quest for 'historical economics'"

Hargreaves Heap, Shawn (1980), "Choosing the Wrong 'Natural' Rate: Accelerating Inflation or Decelerating Employment and Growth?" Economic Journal 90(359) (Sept): 611–20 (ISSN 0013-0133)

Mahoney, James (2000). "Path Dependence in Historical Sociology". Theory and Society. 29 (4): 507–548. :10.1023/A:1007113830879. S2CID 145564738.

doi

Stephen E. Margolis and S.J. Liebowitz (2000),

"Path Dependence, Lock-In, and History"

Nelson, R. and S. Winter (1982), An evolutionary theory of economic change, Harvard University Press.

(January 2006). "Path dependence". Quarterly Journal of Political Science. 1 (1): 88. doi:10.1561/100.00000006. Pdf.

Page, Scott E.

Penrose, E. T., (1959), The Theory of the Growth of the Firm, New York: Wiley.

Pierson, Paul (2000). "Increasing Returns, Path Dependence, and the Study of Politics". American Political Science Review, June.

_____ (2004), Politics in Time: Politics in Time: History, Institutions, and Social Analysis, Princeton University Press.

Puffert, Douglas J. (1999), (based on the entry "Pfadabhängigkeit in der Wirtschaftsgeschichte", in the Handbuch zur evolutorischen Ökonomik)

"Path Dependence in Economic History"

_____ (2001),

"Path Dependence in Spatial Networks: The Standardization of Railway Track Gauge"

_____ (2009), Tracks across continents, paths through history: the economic dynamics of standardization in railway gauge, University of Chicago Press.

Schwartz, Herman. , undated mimeo

"Down the Wrong Path: Path Dependence, Increasing Returns, and Historical Institutionalism".

Shalizi, Cosma (2001), , unpublished website, with extensive references

"QWERTY, Lock-in, and Path Dependence"

Vergne, J. P. and R. Durand (2010), , Journal of Management Studies, 47(4):736–59, with extensive references