Path Dependency - Definition
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What is Path Dependency?
Path dependency is a theory that explains how choices for present situations are made based on past behavior, knowledge, and history. This is true even if unrelated or irrelevant to the current situation.
This theory also extends to products and services in which individuals sustain the continuity of a product or service based on historical use.
For instance, a company might continue to use an analog system or service only because it has recorded successes in the past, despite the introduction of digital systems.
Back to: Management & Organizational Behavior
A Little More on What is Path Dependency
Several factors that are connected to path dependence include ease of use, cost and financial implications, inability to commit to a change, and easier access. For instance, an individual or a group of people is likely to continue on a path because it is cheaper than the newly established path and it is easy to use.
Financial implications of adopting a new method, service, or product are always considered and the cost sometimes relegate people to choosing the old product.
The inability to embrace new options or adopt new methods is sometimes linked to failure to consider past experiences and how they differ from current experiences.
In path dependency, decisions are made based on past history not considering the peculiarity of the past and present conditions.