Automotive modal lock-in: The role of path dependence and large socio-economic regimes in market failure

Briggs, Maxwell, Webb, Jeremy C., & Wilson, Clevo (2015) Automotive modal lock-in: The role of path dependence and large socio-economic regimes in market failure. Economic Analysis and Policy, 45, pp. 58-68.

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This paper addresses less recognised factors which influence the diffusion of a particular technology. While an innovation’s attributes and performance are paramount, many fail because of external factors which favour an alternative. This paper, with theoretic input from diffusion, lock-in and path-dependency, presents a qualitative study of external factors that influenced the evolution of transportation in USA. This historical account reveals how one technology and its emergent systems become dominant while other choices are overridden by socio-political, economic and technological interests which include not just the manufacturing and service industries associated with the automobile but also government and market stakeholders. Termed here as a large socio-economic regime (LSER),its power in ensuring lock-in and continued path-dependency is shown to pass through three stages, weakening eventually as awareness improves. The study extends to transport trends in China, Korea, Indonesia and Malaysia and they all show the dominant role of an LSER. As transportation policy is increasingly accountable to address both demand and environmental concerns and innovators search for solutions, this paper presents important knowledge for innovators, marketers and policy makers for commercial and societal reasons, especially when negative externalities associated with an incumbent transportation technology may lead to market failure.

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ID Code: 82756
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Automotive transport mode, Diffusion, Lock-in, Path dependence, Market failure
DOI: 10.1016/j.eap.2015.01.005
ISSN: 0313-5926
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2015 Economic Society of Australia
Deposited On: 14 Apr 2015 23:35
Last Modified: 14 Jul 2015 04:15

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