Systems Integration perspective on Path dependence and information economy

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Table of Contents

Path Dependence in systems engineering and integration
Arguments regarding Path Dependence
Discussion on Path Dependence
Conclusion
Works Cited

Path Dependence in systems engineering and integration

According to Posner this concept of path dependence can be traced to the economist view. Based on this viewpoint it is thus believed that where we end up is often dictated by where we began despite the fact that this end point may not be the most suitable (Posner 156).

In relation to systems engineering the best know example of this concept is observed when we consider the typewriter keyboard. It has been reported that the main cause of the current design was to limit the speed of typing while preventing the jamming of keys (Posner 156).

However it has been noted that the advent of electric typewriters and word processing effectively brought an end to jamming of keys while the user is still stuck with the old keyboard. The reasons for this can be attributed to costs of reaching an agreement with manufacturers on a new keyboard and the retraining of millions of people who have grown accustomed to the old keyboard (Posner 156).

Based on these factors it can be assumed that path dependence will be maintained when costs are high in relation to benefits and the transition requires a significant degree of coordination (Posner 156). This is especially so because though there may be significant benefits associated with change, the overwhelming task and cost of bringing about behavior change in a large group may outweigh these perceived benefits.

Based on the profound implications of this allegation path dependence has become a widely debated issue. It has been argued that due to path dependence consumers may be duped into purchasing inferior merchandise (Liebowitz and Margolis 228).

It has thus become crucial that any myths or misconceptions into the role of path dependence be dispelled as the government may begin to intervene with a view to ‘saving’ consumers (Liebowitz and Margolis 228).

Arguments regarding Path Dependence

In light of the implications of path dependence it is crucial that we assess the arguments for and against this principle to avoid any further misunderstandings. The main examples cited by defendants of the path dependence theory are related to the typewriter keyboard and VHS vs. Beta video cassettes (Liebowitz and Margolis 229).

It has been mentioned that the QWERTY keyboard was designed to slow down typists and prevent the jamming of keys. During this era, typing competitions were popular and the QWERTY keyboard managed to gain prowess during this era due to its ability to prevent jamming of keys.

Based on this position it is believed that computer users and typists today are stuck with this keyboard which was created to solve a problem which currently does not exist.

The main reason that path dependence proponents are against the QWERTY keyboard is because it is believed a better keyboard was later developed but path dependence prohibited its adoption (Liebowitz and Margolis 229). In relation to the QWERTY keyboard these issues from the principle arguments against path dependence.

As mentioned earlier it is crucial that such arguments be revisited to understand whether the impact of path dependence has in fact hampered adoption of better technology.

In relation to this, it has been found that unlike what is popularly stated in relation to the QWERTY keyboard, it was not designed to slow down typists but to separate keys that were struck often (Liebowitz and Margolis 229). This has been confirmed by tests that have indicated that the keyboard is actually efficient for typing and ergonomically sound.

In addition to the above point it has been noted that in the typing contests of the previous era, QWERTY was not always the winner (Liebowitz and Margolis 229). It has been determined that these contest results were published in several major newspapers.

The widespread dissemination of contest information suggests that the users preferred the arrangement and were not locked in due to the contest results (Liebowitz and Margolis 229). Lastly, it has also been established that the Dvorak is not better than QWERTY.

This comes in light of information that indicates the study to show its superiority was not an official study and was carried out by the individual who designed the keyboard (Liebowitz and Margolis 1995, 230).

Due to the implications of path dependence several issues have arisen in the recent past. One of the most popular cases that involves this principle involved Microsoft and several rival executives (McCullagh 233).

The main argument in this case was that Microsoft was using its huge monopoly in operating systems to illegally dominate other software such as browsers, spreadsheets, etc. The opponents argued that this was illegal exploitation of consumers due to the quality of some of the software offered.

In the conclusion of this particular case it was found that there was no network effect and thus no crime by Microsoft. This comes about due to the fact that Microsoft was constantly producing higher quality products than other competitors. In addition to that when it did not have a superior product it was observed that Microsoft did not make attempts to impede progress of rival software (McCullagh 233).

Based on this therefore the company could not be held responsible for any network effects. This is especially due to the fact that it has been observed that consumers do in fact switch en masse when a recognizably better product was available.

In light of this position with regard to the Microsoft Antitrust suit and the QWERTY issue it is possible to conclude that the impact of path dependence on systems engineering and integration has not been significant.

Discussion on Path Dependence

In light of the magnitude of the implications of path dependence, some individuals have gone to great lengths to study the impact of path dependence. In doing so some of the points identified include the notion that there are essentially three types of path dependence (Magnusson and Ottoson 46).

In the first instance or degree of path dependence it is reported that there exists an “element of persistence or durability in relation to decision making” (Magnusson and Ottoson 46). This suggests that the decisions are not based on any implied efficiency but are merely the result of past practices.

This influence has to have been seen to have persisted even where participants properly predicted market prices and conditions upon reaching the decision.

On the other hand second degree path dependence has been stated to be a situation where there is imperfect foresight in decision making (Magnusson and Ottoson 46). Based on this flaw prior efficiency decisions turn out to be inefficient. In this scenario the decisions made are regrettable and very costly to change; yet again no efficiency judgments are drawn.

Third degree path dependency occurs where the strongest efficiency claims lay. In this case there are possible remedial inefficiencies that remain uncorrected (Magnusson and Ottoson 46). In this type of dependence there are intertemporal relationships which are responsible for durable and negative consequences for the economy.

It is based on this position that opponents of path dependency such as Liebowitz and Margolis challenge the possibility of such conditions on both theoretical and empirical grounds (Magnusson and Ottoson 46).

This argument does not ignore the fact that despite the efficiency effects from past policies and decisions have the capability of making significant changes in relation to distributional implications. This is because regardless of efficiency implications, part of transaction costs arises from the adjustment to a new path (Magnusson and Ottoson 46).

In response to the arguments in favor of path dependence some opponents have argued that the impact is unlikely to significant given the role of entrepreneurs (Garud and Karnoe 2). These people generally believe that entrepreneurs navigate a flow of events even as they constitute these events.

This position suggests that entrepreneurs are not passive observers in a stream of events but instead are knowledgeable agents within the stream of events. Due to their knowledge entrepreneurs can thus act and reflect in other ways than what is expected based on existing social rules (Garud and Karnoe 2).

These people suggest that entrepreneurs are constantly trying to make efforts to shape paths in real time. This is achieved by setting processes in motion that are capable of actively shaping emerging social practices and artifacts (Garud and Karnoe 2). Some of these actions are capable of resulting in a new technology field and it is believed that it is only in such cases that path dependence may have a persistent effect (Garud and Karnoe 2).

In light of this it has been reported that entrepreneurs commonly practice using exploration and experimentation to identify potential solutions. Whereas the initial experimentation is likely to carry some minor errors that will later be identified, it is uncommon for future technology to inherit these mistakes (Garud and Karnoe 2).

This arises from entrepreneurial nature which leads to the creation of new technology. This nature requires that entrepreneurs embrace the logic of mindful deviation and as such are unlikely to be influenced by prior decisions in their actions (Garud and Karnoe 2).

Conclusion

In this report the discussion has focused on presenting the position of path dependence in relation to systems engineering. It has been observed that path dependence is originally an economist’s perception in relation to change. The proponents of the argument cite examples such as the QWERTY keyboard that has persisted through generations of computers despite the existence of substitutes.

Opponents on the other hand have performed tests to indicate that such persistence can be traced to efficiency rather than dependence. In light of the facts presented it would appear that the opponents have a stronger case and path dependence is unlikely to result in poor decision making.

This is supported by evidence that indicates that the process of entrepreneurship tends strongly towards the deviation from norms and as such is unlikely to simply inherit decisions. This is further supported by the explorative and experimental nature of entrepreneurship.

Works Cited

Garud, Raghu and Peter Karnoe. Path Dependence and Creation. Mahwah, NJ: Lawrence Erlbaum Associates Inc., Publishers. 2001. Print.

Liebowitz, Stan J. and Stephen E. Margolis. “Path dependence, Lock in, and History.” Journal of Law, Economics, & Organization. 11.1 (1995): 205-226.

Liebowitz, Stan and Stephen E. Margolis 1995. “Policy and Path Dependence”. Web.

Magnusson, Lars and & Jan Ottoson. The Evolution of Path Dependence. Cheltenham, UK: Edward Elgar Publishing Limited. 2009. Print.

McCullagh, Declan 1999. Book Pulls MS off the Hook. Web.

Posner, Richard A. Frontiers of Legal Theory. Printed in the USA: Harvard University Press, 2004. Print.

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