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Cited by 4,547Economic Theory and InstitutionsEconomic Theory and PolicyEconomic Growth and Productivity

Increasing Returns and Path Dependence in the Economy

Open access
Arthur, W.·2026·University of Michigan Press eBooks
DOI 10.3998/mpub.10029
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Crossref · 10.3998/mpub.10029

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  • Increasing returns arguments help explain the prevalence of pockets of specialized economic activity, from Silicon Valley to the high-end textile manufacturers of Northern Italy.

    “Increasing returns arguments help explain the prevalence of pockets of specialized economic activity, from Sili con Valley to the high-end textile manufacturers of Northern Italy.”

    From Increasing Returns, Path Dependence, and the Study of Politics (2000) · cites this paper as Arthur 1994

    The Description (indexed under “8. Path Dependence, Self-Reinforcement, and Human Learning”; no page given) says the book applies increasing-returns ideas to the development of industrial clusters such as Silicon Valley. The passages found do not mention Northern Italy or its high-end textile manufacturers, so that example is not supported by our copy. (LLM, conf=0.83)

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  • Under certain conditions a single technology may achieve a decisive advantage over competitors even though it is not necessarily the most efficient in the long-run; once initial advantage is gained, feedback effects may lock in this technology, excluding alternatives.

    “As Brian Arthur and Paul David have argued, under certain conditions a single technology may achieve a decisive advantage over competitors, even though it is not necessarily the most efficient one in the long-run (Arthur 1994;David 1985).Once the initial advantage is gained, however, feedback effects may lock in this technology, excluding other alter natives.”

    From Increasing Returns, Path Dependence, and the Study of Politics (2000) · cites this paper as Arthur 1994

    Split into 2 atoms — 0 confirmed, 2 partially supported, 0 disputed, 0 misattributed, 0 unverifiable. Expand the claim to see per-atom verdicts.

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  • Increasing returns dynamics may be path-inefficient: the locked-in outcome may not generate higher pay-offs than a foregone alternative over the long run.

    “4. Potential Path-Inefficiency. The outcome that becomes locked-in may not in fact generate higher pay-offs than a foregone alternative over the long run.In this case, the process may be called path-inefficient.”

    From Increasing Returns, Path Dependence, and the Study of Politics (2000) · cites this paper as Arthur (1994)

    The available copy shows a table-of-contents entry for “Competing Technologies, Increasing Returns, and Lock-In by Historical Small Events” (no page given), but not the chapter’s argument. Searches for path-inefficiency and for locked-in outcomes versus foregone alternatives returned no passage addressing their long-run pay-offs. (LLM, conf=0.72)

    Experimental — accuracy not yet measured

  • Increasing returns dynamics are characterized by unpredictability: because early events have a big impact and are partly random, many outcomes may be possible and we cannot predict ahead of time which end-state will be reached.

    “1. Unpredictability.Because early events have a big impact and are partly random, many outcomes may be possible.We cannot predict ahead of time which of many possible end-states will be reached.”

    From Increasing Returns, Path Dependence, and the Study of Politics (2000) · cites this paper as Arthur (1994)

    The indexed passages headed “Competing Technologies, Increasing Returns, and Lock-In by Historical Small Events” and “Path Dependence, Self-Reinforcement, and Human Learning” contain chapter titles, not the chapters’ arguments. Searches for unpredictable end-states and the effect of partly random early events found no passage in our copy that addresses the claim. (LLM, conf=0.72)

    Experimental — accuracy not yet measured

  • Arthur (1994) has shown that many of the features of the path dependent case have a greater range of application, but not all of them.

    “Arthur (1994) has shown that many of the features of this case have a greater range of application, but not all of them.”

    From Increasing Returns, Path Dependence, and the Study of Politics (2000) · cites this paper as Arthur 1994

    The available copy contains a description and table of contents, including chapters on path dependence, but no passage stating which features apply more broadly or which do not. Searches for the sentence and a paraphrase found no discussion that settles the claim. (LLM, conf=0.74)

    Experimental — accuracy not yet measured

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Authors
Arthur, W.
Corresponding author
Arthur, W.
ORCID
Arthur, W.
Venue
University of Michigan Press eBooks
Publisher
University of Michigan Press
Published
2026
DOI
10.3998/mpub.10029
OpenAlex
W2009202666
Cited by
4,547
References
1
Citations by year
2026: 123 · 2025: 138 · 2024: 95 · 2023: 140 · 2022: 137 · 2021: 125 · 2020: 174 · 2019: 186 · 2018: 183 · 2017: 151 · 2016: 167 · 2015: 182 · 2014: 187 · 2013: 197 · 2012: 175
FWCI
241.30
Type
book
Language
en
Open access
Licence
cc-by
Locations
  • University of Michigan Press eBooks (publishedVersion, cc-by)
  • Project Muse (Johns Hopkins University) (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Theory and Institutions
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
Keywords
increasing returns, path dependence, economic growth, industrial organization, economies of scale, market structure

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