The Calf Path:

Something is done for some reason, possibly arbitrary, possibly adapted to circumstances of the time. Once it has been done that way, it is easier to continue to do it that way. Once a path has been trodden down it is easier to follow it, since a different path would require you to push through underbrush and high grass with the risk of concealed puddles. Everyone keeps following the calf path even if there is a shorter and straighter route they could have taken.

In the modern economic literature on path dependence it is often linked to the idea of network externalities. Once everyone else is using Microsoft Word it is convenient for you to use it as well, since that lets you exchange documents with other people without worrying about converting from one format to another. So once Word gets established as the standard, everyone keeps using it even if some newer word processor is better.[1]

Path dependency implies the possibility of gains through coordinated action. If some brave soul marks out a better path and other follow it, trampling it down, we all end up better off. If we all agree to shift to the better word processor simultaneously, we all gain.

The poster child for this argument used to be the history of the Qwerty[2] keyboard layout as described by Stanford economist and historian Paul David. As he told the story,[3] the keyboard layout of an early typewriter was designed to slow typists down in order to prevent keys from jamming. That layout got its dominant position in the nascent typewriter industry because an important contest was won by the world’s only touch typist using a Qwerty typewriter. Once established, it maintained its position despite the development of the much superior Dvorak layout. Nobody wanted to train on a Dvorak keyboard when everyone else, including all potential employers, were using Qwerty. Since almost all typewriters were made with the Qwerty keyboard layout there was no easy way to switch.

It is a good story but almost none of it is true, as Liebowitz and Margolis demonstrated in “The Fable of the Keys,”[4] their rebuttal to Paul David’s article. The Qwerty layout was designed to reduce key jamming not by slowing typists down but by putting letters that commonly followed each other on opposite sides of the keyboard, since the early mechanical typewriters had two banks of keys and jamming occurred when two keys in the same bank were hit in quick succession. That is a reasonably good design for modern typewriters as well, since it means that the typist is usually alternating hands. There were lots of typing contests, not all of which were won by the Qwerty layout, and lots of typists of comparable speed. Most damning of all, the chief evidence of the superiority of the Dvorak layout came from tests done by the U.S. navy at a time when August Dvorak, the inventor of the Dvorak layout, was employed by the navy as their expert on time and motion studies. According to at least one source, he conducted the tests that purportedly demonstrated the superiority of the keyboard layout on which he held the patent.

Liebowitz and Margolis succeeded in obtaining the report on the navy experiments and concluded that they did not demonstrate much of anything, since the experiments on Dvorak and Qwerty keyboards were evaluated in different ways, done with different experimental subjects with, probably, different backgrounds and qualifications. A later and more carefully controlled experiment found no advantage to the Dvorak keyboard. More recent studies have found little or no advantage to Dvorak.

The history of typewriter layouts does not support the story of path dependence leading to an inferior outcome but it does not follow that the problem does not exist. For a better example, consider English spelling.

[1] Liebowitz and Margolis, authors of an article I discuss a little later, are also authors of Winners, Losers, and Microsoft, which argues that while that story may be logically possible it is not what we actually observe in the software industry. The pattern as they see it is serial competition.

There is a dominant program in a niche, such as word processing or spread sheets, which almost everyone uses. Eventually a competitor produces a better program in the same niche, signalled by favorable reviews in computer publications, and everyone switches. Thus Visicalc was replaced by by Lotus 123, Lotus by Excel. In the Word Processor market, Word Perfect was replaced by Word.

[2] So called because the first six keys of the top row of letters are Q,W,E,R,T,Y.

[3] Paul David, “Clio and the Economics of QWERTY.”


[4] S. J. LIEBOWITZ and STEPHEN E. MARGOLIS,  THE FABLE OF THE KEYS  (Journal of Law & Economics vol. XXXIII (April 1990)]