Competing Technologies: Disturbance, Selection, and the Possibilities of Lock-in

TL;DR

This paper uses evolutionary theory to analyze Arthur's model of competing technologies, showing how reflexivity and uncertainty can prevent lock-ins and influence technological trajectories.

Contribution

It extends Arthur's model by incorporating reflexivity and uncertainty, providing new insights into the dynamics of technological competition and lock-in phenomena.

Findings

Lock-ins can be suppressed by consumer reflexivity and uncertainty.

Technological developments affecting consumer preferences do not change trajectories.

Changes in network parameters can induce ordered substitution processes.

Abstract

Arthur's (1988) model for competing technologies is discussed from the perspective of evolution theory. Using Arthur's own model for the simulation, we show that 'lock-ins' can be suppressed by adding reflexivity or uncertainty on the side of consumers. Competing technologies then tend to remain in competition. From an evolutionary perspective, lock-ins and prevailing equilibrium can be considered as different trajectories of the techno-economic systems under study. Our simulation results suggest that technological developments which affect the natural preferences of consumers do not induce changes in trajectory, while changes in network parameters of a technology sometimes induce ordered substitution processes. These substitution processes have been shown empirically (e.g., Fisher & Prey, 1971), but hitherto they have been insufficiently understood from the perspective of evolutionary modelling. Implications for technology policies are discussed.