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Innovation and Lock-in

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  • Uwe Cantner

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Simone Vannuccini

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

Abstract

This study focuses on a well-known but yet elusive concept: (technological) lock-in. We summarize what is known about the nature of lock-in and offer a critical view on history-dependent processes based on recent contributions to the literature. We discuss if lock-ins are really inescapable, especially when innovation is concerned. Also, we address the question if lock-in is a well-defined concept at all. To offer a fresh view on lock-in and to tackle the issues just raised, we employ the replicator dynamics model. By making a parallel between monopolization in the replicator dynamics and the occurrence of lock-ins, we show that the convergence of a system to a given outcome can be reversed, under certain conditions. We highlight the need for a more precise demarcation of the conceptual boundaries of lock-in and path dependence, both from the formal and the empirical side, and suggest that further structural features - for example users heterogeneity - may play a relevant role in affecting the outcome of dynamic allocation and competition processes.

Suggested Citation

  • Uwe Cantner & Simone Vannuccini, 2016. "Innovation and Lock-in," Jena Economic Research Papers 2016-018, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2016-018
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    More about this item

    Keywords

    Lock-in; path dependence; history dependent processes; innovation; competitive diffusion; Polya urn;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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