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Competing Technologies, Technological Monopolies and the Role of Convergence to a Stable Market Structure

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  • Andrea Bassanini
  • Giovanni Dosi

Abstract

Empirically the diffusion of competing technologies most often displays either "lock-in" to a quasi-monopoly or apparent turbulence but rarely stable market-sharing. In contrast with widespread views, we show that, first, unbounded increasing returns are neither necessary nor sufficient to lead to technological monopolies. Rather, asymptotic patterns depend on the relative impact of increasing returns and the degree of adopters heterogeneity. Second, the unlikely empirical occurence of stable market-sharing is slower then to monopoly; thus, in the former case, the enviroment often changes before the market-share trajectory becomes stable.

Suggested Citation

  • Andrea Bassanini & Giovanni Dosi, 1999. "Competing Technologies, Technological Monopolies and the Role of Convergence to a Stable Market Structure," LEM Papers Series 1999/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:1999/03
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    Cited by:

    1. 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.
    2. Uwe Cantner & Simone Vannuccini, 2017. "Innovation and lock-in," Chapters, in: Harald Bathelt & Patrick Cohendet & Sebastian Henn & Laurent Simon (ed.), The Elgar Companion to Innovation and Knowledge Creation, chapter 11, pages 165-181, Edward Elgar Publishing.
    3. Malerba, Franco & Nelson, Richard & Orsenigo, Luigi & Winter, Sidney, 2008. "Public policies and changing boundaries of firms in a "history-friendly" model of the co-evolution of the computer and semiconductor industries," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 355-380, August.
    4. Degner, Harald, 2010. "Windows of technological opportunity: do technological booms influence the relationship between firm size and innovativeness?," FZID Discussion Papers 15-2010, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    5. Carolina Castaldi & Giovanni Dosi, 2003. "The Grip of History and the Scope for Novelty: Some Results and Open Questions on Path Dependence in Economic Processes," LEM Papers Series 2003/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. 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.
    7. Bulat Sanditov, 2005. "Patent Citations, the Value of Innovations and Path-Dependency," KITeS Working Papers 177, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2005.

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