Increasing Returns and Path Dependence in the Economy
by W. Brian Arthur,
Univ. of Michigan Press,
Ann Arbor, 1994.
Foreword by Kenneth J. Arrow.
This is a collection of my papers on increasing returns, written between 1982 and 1992. Many of the articles are concerned with the dynamics of markets under increasing returns--in particular the role of positive feedbacks in locking in a single dominant product, technology or company.
These papers didn't foresee the "information economy," or e-cash, or virtual banking. But they did introduce or deal with many of the concepts central to the high-tech economy: lock-in, path dependence, network externalities, role of small historical events, positive feedbacks, competing technologies, winner-take-all .
There is one popular article from Scientific American, and the much cited 1989 Economic Journal article on Competing Technologies. Other topics covered are regional economics under increasing returns, learning in economics, nonlinear Polya processes, and the history of economic thought on increasing returns.
Some of these articles are downloadable from my papers page.
"This beautifully written collection of essays represents one of the fundamental contributions to economic science in the last two decades." Complexity, 1 no. 3, 1996
"One of the most important works on economics in the past 50 years," Fast Company, Issue 14, 1998
"One of the most important theoretical contributions in recent years," Moneta e Credito, June 1995