1 Introduction : The Market Process and the Economics of QWERTY

Some recent claims that high technology markets fail to operate efficiently have become very influential, not only among economists (theorists and economic historians) but also in the popular press and in public policy. This is a new type of “market failure” mostly associated with the goods (sometimes known as “information goods”) that are associated with many of the technological advances regarding the generation and use of information in one form or another. In economics, the literature is known generally by association with the technical concepts of “network-effects,” “path dependence” and “lock-in.” These concepts suggest that the outcomes we observe (for example, in the generation of products to record and play video images, process data, or simply type book chapters) may not be particularly efficient. In this view of the world, random events may “lock us in” to a path and, therefore, an outcome that is socially inferior to an alternative one that is, or was, available. This view of the world has come to be known generally as “the economics of QWERTY.” This general field of inquiry in economics is associated with parallel developments in the fields of mathematics and statistics having to do with topics like “chaos” and “complexity.” In the essays reprinted here, Stan Liebowitz and Stephen Margolis have critically examined the various aspects of the economics of QWERTY (to be defined below) and its implications. With eloquence and relevance they call into question the historical accuracy of the standard account of the QWERTY case and of similar “myths” of lock-in. They contend that no plausible case of sub-optimal lock-in has ever been satisfactorily documented. While The Economics of QWERTY Introduction 2