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Increasing returns: historiographic issues and path dependence

Kenneth Arrow

The European Journal of the History of Economic Thought, 2000, vol. 7, issue 2, 171-180

Abstract: Writing a history of the analysis of increasing returns in economics is qualitatively different from the usual cumulative history of knowledge, as exemplified by the history of perfectly competitive analysis. The history of increasing returns is much less continuous. The reason for this irregular history lies, in my view, in the analytic nature of the subject. I concentrate on the recent history of the implications of increasing returns for path dependence in economic development. Foreshadowed by Veblen (1915) the topic was made explicit by Paul David in some theoretical analyses of topics in economic history (1971, 1975) and then by subsequent papers by David and by Brian Arthur in the 1980s. Contemporaneously, Farrell, Katz, Saloner, and Shapiro came to parallel conclusions in a very specific industrial organization context marked by network externalities.

Keywords: Increasing Returns Path Dependence Cumulation Of Knowledge (search for similar items in EconPapers)
Date: 2000
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