[XML-DEV Mailing List Archive Home] [By Thread] [By Date] [Recent Entries] [Reply To This Message] RE: Hobbsian processes
Hi Len, For our fellows in that list here is a good link about Nash's equilibrium: http://william-king.www.drexel.edu/top/eco/game/nash.html Len said: So can you explain to me how adopting or not adopting the data standard affects that equilibrium? Are you saying that in such an equilibrium, nothing changes unless the whole industry changes? Or that nothing changes until some threshold of the number of installed software systems of a given type use that standard? Didier replies: Yes you are right on that, this is caused by the network effect and the well known technology introduction curve. You always need a critical mass before the mainstream barge in. I think that we see an important modification of the ecosystem when these numbers take off, for instance, the HTML standard (or de facto standard), HTTP, SMTP and several other technologies reduced the overall cost by reducing transactions' friction, by reducing the transaction costs or by reducing the costs of adaptation. Pure Adam Smith behavior leads to increased cost in the case of communication artifacts (i.e. networks). As soon as we speak of network, the groups behavior is becoming important. I a group of neurons do not play the same communication game as the others we face important thinking problems. When a network is too fragmented it does not work properly. Maybe it is also a question of mindset and demographic characteristics, the millennium cohort will probably know that by intuition because they were immerged in the connected world since childhood. This is quite different for boomers and GenXers raised in a top down and one to many world. The critical mass effect, at least in networked systems, can be accelerated when a certain consensus has been reached on common ways to exchange information. This will push the overall equilibrium toward the ideal solution set. Otherwise, the resultant solution set is still at the edge. in equilibrium yes, but a lot more instable than the former. We now have to think not only of equilibrium but also in term of stability of the equilibrium. Off course, constructive destruction(1) will occur in times but the scaled reached when the network has reached some standardization is way beyond what would happen without any. (1) http://transcriptions.english.ucsb.edu/archive/courses/liu/english25/mat erials/schumpeter.html Cheers Didier PH Martin
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