Path Dependence in Decision-Making Processes: Exploring the Impact of Complexity under Increasing Returns

BuR Business Research Journal, Vol. 2, No. 1, May 2009

18 Pages Posted: 12 Mar 2010

See all articles by Jochen Koch

Jochen Koch

affiliation not provided to SSRN

Martin Eisend

Free University of Berlin (FUB)

Arne Petermann

affiliation not provided to SSRN

Abstract

The development of path-dependent processes basically refers to positive feedback in terms of increasing returns as the main driving forces of such processes. Furthermore, path dependence can be affected by context factors, such as different degrees of complexity. Up to now, it has been unclear whether and how different settings of complexity impact path-dependent processes and the probability of lock-in. In this paper we investigate the relationship between environmental complexity and path dependence by means of an experimental study. By focusing on the mode of information load and decision quality in chronological sequences, the study explores the impact of complexity on decision-making processes. The results contribute to both the development of path-dependence theory and a better understanding of decision-making behavior under conditions of positive feedback. Since previous path research has mostly applied qualitative case-study research and (to a minor part) simulations, this paper makes a further contribution by establishing an experimental approach for research on path dependence.

Keywords: Complexity, Decision-making, Path dependence, Lock-in

Suggested Citation

Koch, Jochen and Eisend, Martin and Petermann, Arne, Path Dependence in Decision-Making Processes: Exploring the Impact of Complexity under Increasing Returns. BuR Business Research Journal, Vol. 2, No. 1, May 2009. Available at SSRN: https://ssrn.com/abstract=1568004

Jochen Koch (Contact Author)

affiliation not provided to SSRN ( email )

Martin Eisend

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

Arne Petermann

affiliation not provided to SSRN ( email )

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