IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2016-018.html
   My bibliography  Save this paper

Innovation and Lock-in

Author

Listed:
  • 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 Economics Research Papers 2016-018, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2016-018
    as

    Download full text from publisher

    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2016/wp_2016_018.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mokyr, Joel, 1990. "Punctuated Equilibria and Technological Progress," American Economic Review, American Economic Association, vol. 80(2), pages 350-354, May.
    2. Matthias Göcke, 2002. "Various Concepts of Hysteresis Applied in Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 16(2), pages 167-188, April.
    3. repec:cup:cbooks:9780511771576 is not listed on IDEAS
    4. Ron Boschma, 2015. "Towards an Evolutionary Perspective on Regional Resilience," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 733-751, May.
    5. Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    6. Silverberg, Gerald & Verspagen, Bart, 2005. "A percolation model of innovation in complex technology spaces," Journal of Economic Dynamics and Control, Elsevier, vol. 29(1-2), pages 225-244, January.
    7. Freeman, Chris & Louca, Francisco, 2002. "As Time Goes By: From the Industrial Revolutions to the Information Revolution," OUP Catalogue, Oxford University Press, number 9780199251056, Decembrie.
    8. Silverberg, Gerald & Lehnert, Doris, 1993. "Long waves and 'evolutionary chaos' in a simple Schumpeterian model of embodied technical change," Structural Change and Economic Dynamics, Elsevier, vol. 4(1), pages 9-37, June.
    9. Page, Scott E., 2006. "Path Dependence," Quarterly Journal of Political Science, now publishers, vol. 1(1), pages 87-115, January.
    10. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    11. Giovanni Dosi & Marcelo C. Pereira & Maria Enrica Virgillito, 2017. "The footprint of evolutionary processes of learning and selection upon the statistical properties of industrial dynamics," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(2), pages 187-210.
    12. Andrea P. Bassanini & Giovanni Dosi, 2006. "Competing Technologies, Technological Monopolies and the Rate of Convergence to a Stable Market Structure," Chapters, in: Cristiano Antonelli & Dominique Foray & Bronwyn H. Hall & W. Edward Steinmueller (ed.), New Frontiers in the Economics of Innovation and New Technology, chapter 2, Edward Elgar Publishing.
    13. Metcalfe, J S, 1994. "Competition, Fisher's Principle and Increasing Returns in the Selection Process," Journal of Evolutionary Economics, Springer, vol. 4(4), pages 327-346, November.
    14. Josh Lerner & Scott Stern, 2012. "The Rate and Direction of Inventive Activity Revisited," NBER Books, National Bureau of Economic Research, Inc, number lern11-1, January.
    15. Uwe Cantner & Ivan Savin & Simone Vannuccini, 2019. "Replicator dynamics in value chains: explaining some puzzles of market selection," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(3), pages 589-611.
    16. Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 31, pages 1967-2072, Elsevier.
    17. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    18. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    19. Andreozzi, Luciano, 2004. "A note on critical masses, network externalities and converters," International Journal of Industrial Organization, Elsevier, vol. 22(5), pages 647-653, May.
    20. Mazzucato, Mariana, 1998. "A computational model of economies of scale and market share instability," Structural Change and Economic Dynamics, Elsevier, vol. 9(1), pages 55-83, March.
    21. Cowan, Robin, 1990. "Nuclear Power Reactors: A Study in Technological Lock-in," The Journal of Economic History, Cambridge University Press, vol. 50(3), pages 541-567, September.
    22. Christoph H. Loch & Bernardo A. Huberman, 1999. "A Punctuated-Equilibrium Model of Technology Diffusion," Management Science, INFORMS, vol. 45(2), pages 160-177, February.
    23. Cimoli, Mario & Porcile, Gabriel, 2015. "What kind of microfoundations? Notes on the evolutionary approach," Desarrollo Productivo 37758, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    24. Luigi Marengo & Paolo Zeppini, 2016. "The arrival of the new," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 171-194, March.
    25. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    26. Uwe Cantner, 2009. "Competition in Innovation," Chapters, in: Andreas Pyka & Uwe Cantner & Alfred Greiner & Thomas Kuhn (ed.), Recent Advances in Neo-Schumpeterian Economics, chapter 1, Edward Elgar Publishing.
    27. Ron Martin & Peter Sunley, 2006. "Path dependence and regional economic evolution," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 395-437, August.
    28. Grazia Cecere & Nicoletta Corrocher & Cédric Gossart & Muge Ozman, 2014. "Lock-in and path dependence: an evolutionary approach to eco-innovations," Journal of Evolutionary Economics, Springer, vol. 24(5), pages 1037-1065, November.
    29. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    30. Johan Schot & Frank Geels, 2007. "Niches in evolutionary theories of technical change," Journal of Evolutionary Economics, Springer, vol. 17(5), pages 605-622, October.
    31. Witt, Ulrich, 1997. ""Lock-in" vs. "critical masses" -- Industrial change under network externalities," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 753-773, October.
    32. John Metcalfe, 2008. "Accounting for economic evolution: Fitness and the population method," Journal of Bioeconomics, Springer, vol. 10(1), pages 23-49, April.
    33. Unruh, Gregory C., 2000. "Understanding carbon lock-in," Energy Policy, Elsevier, vol. 28(12), pages 817-830, October.
    34. R. M. Goodwin, 1982. "A Growth Cycle," Palgrave Macmillan Books, in: Essays in Economic Dynamics, chapter 12, pages 165-170, Palgrave Macmillan.
    35. R. M. Goodwin, 1982. "Essays in Economic Dynamics," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-05504-3, March.
    36. Uwe Cantner & Simone Vannuccini, 2012. "A New View of General Purpose Technologies," Jena Economics Research Papers 2012-054, Friedrich-Schiller-University Jena.
    37. Easley,David & Kleinberg,Jon, 2010. "Networks, Crowds, and Markets," Cambridge Books, Cambridge University Press, number 9780521195331, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sara Amoroso & Simone Vannuccini, 2019. "Teaming up with Large R&D Investors: Good or Bad for Knowledge Production and Diffusion?," SPRU Working Paper Series 2019-20, SPRU - Science Policy Research Unit, University of Sussex Business School.
    2. Ekaterina Prytkova & Simone Vannuccini, 2022. "On the basis of brain: neural-network-inspired changes in general-purpose chips," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(4), pages 1031-1055.
    3. Cantner, Uwe & Vannuccini, Simone, 2021. "Pervasive technologies and industrial linkages: Modeling acquired purposes," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 386-399.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cantner, Uwe & Vannuccini, Simone, 2021. "Pervasive technologies and industrial linkages: Modeling acquired purposes," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 386-399.
    2. Carrillo-Hermosilla, Javier, 2006. "A policy approach to the environmental impacts of technological lock-in," Ecological Economics, Elsevier, vol. 58(4), pages 717-742, July.
    3. Cristiano Antonelli, 2011. "The Economic Complexity of Technological Change: Knowledge Interaction and Path Dependence," Chapters, in: Cristiano Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, chapter 1, Edward Elgar Publishing.
    4. Uwe Cantner & Simone Vannuccini, 2012. "A New View of General Purpose Technologies," Jena Economics Research Papers 2012-054, Friedrich-Schiller-University Jena.
    5. Ron Martin & Peter Sunley, 2010. "The Place of Path Dependence in an Evolutionary Perspective on the Economic Landscape," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 3, Edward Elgar Publishing.
    6. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    7. Mark Knell & Simone Vannuccini, 2022. "Tools and concepts for understanding disruptive technological change after Schumpeter," Jena Economics Research Papers 2022-005, Friedrich-Schiller-University Jena.
    8. Korzinov, Vladimir & Savin, Ivan, 2018. "General Purpose Technologies as an emergent property," Technological Forecasting and Social Change, Elsevier, vol. 129(C), pages 88-104.
    9. P.J. Lamberson & Scott E. Page, 2018. "First mover or higher quality? Optimal product strategy in markets with positive feedbacks," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 40-52, March.
    10. Kelly Levin & Benjamin Cashore & Steven Bernstein & Graeme Auld, 2012. "Overcoming the tragedy of super wicked problems: constraining our future selves to ameliorate global climate change," Policy Sciences, Springer;Society of Policy Sciences, vol. 45(2), pages 123-152, June.
    11. Befort, N., 2021. "The promises of drop-in vs. functional innovations: The case of bioplastics," Ecological Economics, Elsevier, vol. 181(C).
    12. Martin Henning & Erik Stam & Rik Wenting, 2013. "Path Dependence Research in Regional Economic Development: Cacophony or Knowledge Accumulation?," Regional Studies, Taylor & Francis Journals, vol. 47(8), pages 1348-1362, September.
    13. Rust, Steven & Silberberg, Ben & Turner, Emma & Sharp, Basil, 2020. "Investigating the value of keeping options open for water infrastructure in the Lower Hunter, New South Wales," Utilities Policy, Elsevier, vol. 62(C).
    14. Grazia Cecere & Nicoletta Corrocher & Cédric Gossart & Muge Ozman, 2014. "Lock-in and path dependence: an evolutionary approach to eco-innovations," Journal of Evolutionary Economics, Springer, vol. 24(5), pages 1037-1065, November.
    15. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    16. John Foster, 2017. "Prior Commitment and Uncertainty in Complex Economic Systems: Reinstating History in the Core of Economic Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(4), pages 392-418, September.
    17. Safarzyńska, Karolina & Frenken, Koen & van den Bergh, Jeroen C.J.M., 2012. "Evolutionary theorizing and modeling of sustainability transitions," Research Policy, Elsevier, vol. 41(6), pages 1011-1024.
    18. Luca Fontanelli, 2023. "Theories of market selection: a survey," LEM Papers Series 2023/22, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Rosina Moreno & Ernest Miguélez, 2012. "A Relational Approach To The Geography Of Innovation: A Typology Of Regions," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 492-516, July.
    20. Hötte, Kerstin, 2020. "How to accelerate green technology diffusion? Directed technological change in the presence of coevolving absorptive capacity," Energy Economics, Elsevier, vol. 85(C).

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2016-018. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Pasche (email available below). General contact details of provider: http://www.jenecon.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.