----- Original Message ----- From: Wojtek Sokolowski
Every social-economic institution does that by making choices that create precedence, which in turn, reduce transaction of costs for those who follow their path, whereas those who do not face higher transaction costs (see for example Brian Arthur, Increasing Returns and Path Dependence in the Economy). Attributing that exclusively to capitalism is distorting social/historical reality.
wojtek
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Colin Crouch (European University Institute, Italy) E-mail: colin.crouch at iue.it Problems of the new determinism: A critique of embeddedness and path dependency theory http://www.sase.org/conf2001/abstracts/abstracts.h.html
The current popularity of path dependence theory is using it at the point where it is least developed: how do actors respond when they can no longer find success in following their accustomed path? The problem is that the original theory does not provide for actors trying to learn from their environment. To do this the model has to be changed from one set solely in probability theory to one using game theory as well. This then requires further extensions into a search and opportunity cost game if realistic situations facing actors are to be appropriately modelled. Having attempted to complete these tasks, the paper is in a position to make a fundamental criticism of recent studies which seek to model whole economies or other systems as logically coherent Gestalten. Apart from the existing logical error of treating empirical cases as embodiments of ideal types, these studies make it impossible by definition for path dependences to be changed, and therefore impose an a priori determinism.
See also: http://www.geog.ox.ac.uk/~jburke/wpapers/wpg01-10.pdf Agents, Endowments, and Path-Dependence: Making Sense of European Regional Development Gordon L Clark, Paul Tracey, Helen Lawton Smith