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Unformatted text preview: “locked in”, even if they are not the best possible outcome. Krugman points out the adoption of the QWERTY keyboard as an example of this – here we see a standard that has been locked in, even though, with computers, it isn’t necessarily the most efficient or best technology. It emerged from an accident of the market – with manual typewriters, it works, because it prevents keys from locking. However, as typewriters become electric and then with computers, this is no longer a problem. However, the common practice was to use the QWERTY keyboard, so it became an industry standard. Similarly, the VHS/BetaMax VCRs – Beta was a superior technology, but VHS tapes were more available – it therefore became the industry standard. Thus, strategic trade theory assumes that markets alone do not insure maximum efficiency or that the best products are those that are available....
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This note was uploaded on 11/25/2011 for the course POLISCI 1003 taught by Professor Olson during the Fall '11 term at GWU.
- Fall '11
- Free Market