The Theory of Path Dependence and Polya Urn ProcessesECN 503 / İKT 119 Readings in Evolutionary Political Economy

Week No. #

Altug YALCINTAS, PhDAssociate ProfessorAnkara University

altug.yalcintas@politics.ankara.edu.tr

Two of the cases in which mostly economists are interested

•Dvorak, QWERTY (Q type keyboard), and F type keyboard

•Polya Urn Processes

QWERTY, Dvorak, and F type keyboards

This is available for you to see in the «Sütunlu Salon»

Just check out your laptops and smartphones!

QWERTY, Dvorak, and F type keyboards

Why do we use QWERTY’s?

(1) Are QWERTY’s «the best» keyboard systems?(2) As we mostly type Turkish texts, why do we still use

QWERTY’s which are supposed to be the best keyboard system in English?

(3) Or, why do we not use F keyboards?

QWERTY, Dvorak, and F type keyboards

Why do we use QWERTY’s?

(1) A problem in mechanical keyboards, Dvorak: jamming and clashing of mechanical parts

(2) A solution in mechanical keyboards, Dvorak: speed down the typist lower the number of jammings increase the number of letters, words, and sentences typed

QWERTY, Dvorak, and F type keyboards

Why do we use QWERTY’s?

(3) After the solution: Dvorak QWERTY

(4) Mechanical QWERTY speeds down the typistBut(5) Mechanical QWERTY helps you type more letters and words

(at least, this is the original argument!)

QWERTY, Dvorak, and F type keyboards

Why do we use QWERTY’s?

(6) After digital keyboards, the problem disappeared!No jamming and clashing of mechanical partsIn other words, we have a SOLUTION without a PROBLEM

(7) But we still use QWERTY’s in our PCs, laptops, and tablets even when we type in Turkish!!!

QWERTY, Dvorak, and F type keyboards

Why do we use QWERTY’s?

(8) Sunk costs(9) Habits of conduct(10) Pathways(11) History and institutions matter!

The Theory of Path Dependence

QWERTY, Dvorak, and F type keyboards

What is a pathway anyway?

Source: http://amr.aom.org/content/34/4/689/F1.large.jpg

QWERTY, Dvorak, and F type keyboards

The theory of path dependence

«Small» events Mechanisms of

Positive feedback or self reinforcement

«Big» consequences

QWERTY, Dvorak, and F type keyboards

What is a small event anyway?

• Chance events Super Lotto• Random events «bingo» or «Tombala»• Probabilistic events You pass an exam or you fail• Contingencies Earthquakes

• An important element is the mechanisms of positive feedback and self-reinforcement

QWERTY, Dvorak, and F type keyboards

What is a contingency anyway?

• In Turkish: «Olumsal» or «Başka türlü de olabilecekken olmuş olduğu gibi olan şey»

• Opposite of necessity

QWERTY, Dvorak, and F type keyboards An example to positive feedback mechanisms:Imagine you’re in a music studio, a small bar with live music, or a «köy düğünü»

A small (smaller) sound

A big (bigger) sound

QWERTY, Dvorak, and F type keyboards An example to positive feedback mechanisms:Imagine you’re in a music studio, a small bar with live music, or a «köy düğünü»

BOOM!

QWERTY, Dvorak, and F type keyboards An example to positive feedback mechanisms:Imagine you’re in a music studio, a small bar with live music, or a «köy düğünü»

No feedback in between

Out

put

Input

QWERTY, Dvorak, and F type keyboards

Established cases of path dependence:

• QWERTY vs. Dvorak• VHS vs. Beta• Internet Explorer vs. Netscape• Silicon Valley• Economic clusters

Keep in mind:These cases are, mainly, related to the economics of technology!

QWERTY, Dvorak, and F type keyboards

Other established cases of path dependence:

• Emergence of capitalism• Why did capitalism emerge in Northern Europe?

• Colonialism• Why are some countries rich and others poor?

• Political economy of the European Union• Is the full adoptation of different law systems, customs, and

rules possible?

QWERTY, Dvorak, and F type keyboards

What other cases of path dependence can we think of?:

• Language? • University? • Family?• Science?

• How about your own private lives?

In these cases:• Does history matter?• Can you observe small events?• Can you observe positive feedbacks?

Polya Urn Processes

An experimental game• Significance of small events• Unpredictability and randomness• Nonlinearity

Polya Urn Processes

Polya Urn Processes

A simulation:

http://success-equation.com/urn.html

Polya Urn Processes

Polya Urn processes in social sciences• Value systems• Gender studies• Biographies and autobiographies• Rule of law (in Turkey)• Situation in the Middle East