Friday, May 29, 2015

QWERTY Trilogy

The Scottish economist Neil Kay is still diligent, and has a third paper in the works. Which adds to his previous work on the claims of path dependence put forward by Brian Arthur and Paul David. The first was; Rerun the tape of history and QWERTY always wins, and followed by The QWERTY Problem. About both of which we've earlier written.

This latest provides some fascinating information about what we could call Christopher Latham Scholes (the typewriter's inventor) intellectual property game-theory'smanship. How he used a combination of patents and trade secrets to protect the key to the success of his invention. Which, in a nutshell, was what Neil Kay calls the infrequency principle. I.e., he placed infrequent combinations of letters (XDCFV, for instance) next to each other on the typebasket--which connected to the keyboard--of his machine. Since those letters would only rarely be struck in sequence, jamming of the machine was radically limited.

Which brings us back to the essence of Paul David and Brian Arthur's theorizing--that the Scholes QWERTY keyboard was merely a historical accident. Kay's papers show clearly that that was not the case at all. It was a conscious design, worked out over years. As he summarizes in his concluding remarks;
QWERTY was a consequence of creative design rather than an accident of history, indeed QWERTY was as near-optimal in terms of the crucial performance criterion of format/device compatibility as could be reasonably expected with the state of technical knowledge that existed in Sholes' time. This in turn helps reinforce arguments in [Kay's earlier papers] that QWERTY's role as "paradigm case" of inferior standard in the path dependence literature is not consistent with the evidence, and that instead the case is more consistent with path creation than with path dependence.
Which is going to be hard to swallow for this guy;

[Brian] Arthur: ....When you have increasing returns, at the outset markets are unstable and lurch back and forth according to different small events, and then lock in to one of many possible outcomes. What locks in is a function of what happened in history. The outcome in increasing returns markets depends on small events along the way. The shorthand for that is "path dependence." Meaning that small events along the way decide the outcome.
Not to mention Paul Krugman and his wife Robin Wells, who wrote in their textbook; QWERTY problem: an inferior industry standard that has prevailed possibly because of historical accident”

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