Competing technologies: Lock-ins and lock-outs

Abstract

W. Brian Arthur's model for competing technologies is discussed from the perspective of evolution theory. Using Arthur's own model for the simulation, we show that `lock-ins' can be suppressed by adding reflexivity or uncertainty on the side of consumers. Competing technologies then tend to remain in competition. From an evolutionary perspective, lock-ins and prevailing equilibrium can be considered as different trajectories of the techno-economic systems under study. Our simulation results suggest that technological developments which affect the natural preferences of consumers do not induce changes in trajectory, while changes in network parameters of a technology sometimes induce ordered substitution processes. These substitution processes have been shown empirically (e.g., Fisher {&} Prey, 1971), but hitherto they have been insufficiently understood from the perspective of evolutionary modelling. The dynamics of the selective network determine the possible dissolution of a lock-in given the presence of competing technologies.