Wednesday, September 30, 2009

Network lock down

Tim Harford has a good overview of the network lock down.

Not everyone buys the story of QWERTY lock-in. The American economists Stan Liebowitz and Stephen Margolis call it “The Fable of the Keys” – pointing out that the evidence for Dvorak’s superiority is sketchy. (That Navy test? Conducted by a certain Lieutenant Commander August Dvorak, who owned the patent…) For Liebowitz and Margolis, network lock-in is an interesting theoretical possibility, but in practice they argue that people find a way to move to the new standard.
An intriguing new experiment supports that idea. Tanjim Hossain and John Morgan recruited Hong Kong students and paid them money if they were successfully able to coordinate on the same “platform” – an abstract representation of the choice between standards such as a Blu-Ray or an HD-DVD. What really mattered was to choose the most popular platform, and the students did that – but they also managed to coordinate a move to the higher-quality choice, even if they had started off on the low-quality platform.

The loss of the Bund contract from LIFFE to the DTB is a good example of this change over. There is an interesting paper to be written there. Some background in an Independent story.

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