Monday, September 20, 2010

Path Dependence


Path dependence describes a situation in which initial conditions establish a trajectory, making changes or reversal increasingly difficult.  The concept was developed, and has been studied, primarily in contemporary contexts and in the fields of economics, political science, and science and technology studies.
Michelle Hegmon (Arizona State University)
Increasing Returns and Path Dependence
Traditionally, economists have focused on the search for unique equilibria. The goal is attractive, because it suggested a world of potential predictability and efficiency.  Given knowledge of existing factor endowments and preferences, equilibrium analysis might point to a single optimal outcome.  Moreover, because economists assumed a context of decreasing marginal returns, this analytical goal was potentially achievable.  With decreasing returns, economic actions sill rise in oil prices prompts increased conservation, exploration, and exploitation of other sources of energy, leading to a fall in oil prices.  Each step away from equilibrium is more difficult than the one before.  As Arthur (1994. P1.) summarizes, negative :feedback tends to stabilize the economy because any major changes will be offset by the very reactions they generate…The equilibrium marks the best outcome possible under the circumstances: the most efficient use and allocation of resources.
Politics in Time:
History, Institutions, and Social Analysis,
Paul Pierson.
And the first step, as you know, is always what matters most, particularly when we are dealing with those who are young and tender.  That is the time when they are taking shape and when any imprssion we choose to make leaves a permanent mark –  Plato, The Republic
Nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human deign…If Cromwell said, that a man never mounts higher, than when he knows not whither he is going; it may with more reason be affirmed of communities that they admit of the greatest revolutions where no change is intended –  Adam Ferguson, “An Essay on the History of Civil Society” 1767.
(Both above quotes  found in Pierson)

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