Keynote speech given together with Elke Schüßler at 3rd International Conference on Path Dependence, February 17-18, 2014, Berlin, Germany The talk is based to a large degree on the following article: Dobusch, L./Schüßler, E. (2013): Theorizing Path Dependence: A Review of Positive Feedback Mechanisms in Technology Markets, Regional Clusters and Organizations. In: Industrial and Corporate Change, 22 (3), 617-647.

1. 3rd International Conference on Path Dependence
February 17-18, 2014, Berlin, Germany
Theoretical Artefact or Common Phenomenon?
Revisiting Prominent Cases of Path Dependence
Leonhard Dobusch and Elke Schüßler
Freie Universität Berlin

2. Our Thesis
“
…we suggest researchers should use the
concept [of path dependence] where it is
appropriate, rather than allowing it to
become a corset that is methodologically
and conceptually too constricting.
”
Dobusch and Schüßler (2013: 637)
Leonhard Dobusch & Elke Schüßler

3. <1>
Starting Points

4. Small Events
“
[Small events] are not averaged away
and ‘forgotten’ by the dynamics – they
may decide the outcome.
[Small events] are outside the ex-ante
knowledge of the observer – beyond the
resolving power of his ‘model’ or
abstraction of the situation.
”
W. Brian Arthur (1989: 117-118 )
Leonhard Dobusch & Elke Schüßler

5. Self-reinforcement
“
the crucial feature of a historical process
that generates path dependence
”
Pierson (2004: 21)
Leonhard Dobusch & Elke Schüßler

6. Stability (“Lock-in”)
“
And things have been that way ever since.
”
David (1985: 336)
Leonhard Dobusch & Elke Schüßler

7. Definition
“
[P]ath dependence can be defined as a
rigidified, potentially inefficient action pattern built up by the unintended
consequences of former decisions and
positive feedback processes.
”
Sydow et al. (2009: 696)
Leonhard Dobusch & Elke Schüßler

8. <2>
Path Dependence: A Special Case of Stability?

9. Exercises in Demarcation #1
What Sydow et al. (2009) argue path
dependence is not:
§ Imprinting
§ Escalating Commitment
§ Commitment/Sunk Costs
§ Structural Inertia
§ Reactive Sequences
§ Institutionalizing
Leonhard Dobusch & Elke Schüßler
Consequence:
Path dependence
as a process with
three stages
marked by
decreasing choice

10. Exercises in Demarcation #2
What Vergne and Durand (2010) argue path
dependence is not:
§ Absorptive capacity
§ Institutional persistence
§ Resource accumulation
§ Structural inertia
§ Imprinting
§ Fist-mover advantage
§ Chaos theory
Leonhard Dobusch & Elke Schüßler
Consequence:
path dependence
as a property of a
stochastic
process to be
demonstrated
using controlled
methodologies

11. Exercises in Demarcation #3
Definitely no combination of small events, selfreinforcement, stability (and inefficiency)?
§ Imprinting
§ Absorptive capacity
§ Escalating Commitment
§ Institutional persistence
§ Commitment/Sunk Costs § Resource accumulation
§ Structural Inertia
§ Fist-mover advantage
§ Reactive Sequences
§ Chaos theory
§ Institutionalizing
Leonhard Dobusch & Elke Schüßler

12. The Question
Where is the path?
Leonhard Dobusch & Elke Schüßler

13. <3>
Revisiting Prominent Cases of Path Dependence

14. Revisiting Prominent Cases
§ Microsoft’s dominance in desktop software
markets as a technological path.
§ Silicon Valley as an institutional path.
§ Intel as a case of strategic lock-in.
(NB: Intel is not called „path dependent“ by Burgelman!)
Leonhard Dobusch & Elke Schüßler

15. Microsoft Windows
The Path
Dominance of Microsoft Windows and Office in the PC
software market
Contingency
Despite CP/M being the leading operating system in
1981, business community followed IBM due to
business relations
Local-level: investment and learning effects
Mechanisms
Population-level: expectation, coordination and
complementarity effects
Leonhard Dobusch & Elke Schüßler

16. Silicon Valley
The Path
Silicon Valley as the leading semiconductor technology
cluster worldwide
Contingency
Opening of Shockley Transistor in 1955, lack of capital
at East Coast, spin-off dynamic due to Shockley‘s
poor management skills
Local-level: investment and learning effects
Mechanisms
Population-level: expectation, coordination and
complementarity effects
Bild: https://en.wikipedia.org/wiki/File:AlumRockViewSiliconValley_w.jpg
Leonhard Dobusch & Elke Schüßler

17. Intel
The Path
First lock-in: focus on memory chips; second lock-in:
focus on operating systems
Contingency
Strategic focus on memory chip unintentionally
underminded by resource allocation rule
Mechanisms
Local-level: expectation effects, investment and
learning effects
Local and population-level: complementarity effects
Leonhard Dobusch & Elke Schüßler

18. Comparing Cases (1): Levels and Factors
Levels
§ Positive feedback mechanisms work on and across levels
§ Useful to break population-level mechanisms down into
local-level foundations
Factors
§ Role of actors changes over time as macro-level
mechanisms manifest
§ Background conditions influence the functioning of
mechanisms
Leonhard Dobusch & Elke Schüßler

19. Comparing Cases (2): Increasing Returns?
f(x)
increasing
returns
constant
returns
decreasing
returns
t
f‘(x)
t
Leonhard Dobusch & Elke Schüßler

20. <4>
Looking Back:
Path Dependence as a Conceptual Bridge

21. What is the Value of Path Dependence?
Cases could be labeled differently:
§ Microsoft Windows: Institutional Persistence, Resource
accumulation, First-mover Advantage,…
§ Silicon Valley: Institutionalizing, Imprinting, Institutional
Persistence,…
§ Intel: Escalating Commitment, Commitment/Sunk Costs,
Structural Inertia, Absorptive Capacity,…
>> But: Positive feedback mechanisms explain the
observed patterns of stability!
Leonhard Dobusch & Elke Schüßler

22. Our Conclusion
“
We hope our review of positive feedback
mechanisms at different levels and in
different social settings increases the
applicability of path dependence as an
explanatory concept for researchers’ use
rather than restricting it to the very rare
situations where agency does not matter
or where other historical process
explanations do not hold.
”
Dobusch and Schüßler (2013: 638)
Leonhard Dobusch & Elke Schüßler

23. <5>
Looking Forward: Open Questions

24. Open Questions
Stability vs. lock-in
§ Is a lock-in a specific form of stability and how
can it be measured?
§ What is the role of positive feedback after lockin?
Conceptualizing change
§ What is the role of negative feedback
mechanisms in producing stability and change?
§ How do different mechanisms on different
levels enable/prohibit change?
Leonhard Dobusch & Elke Schüßler

25. Thank you.