Why are we using the most inefficient existing keyboard? The answer is QWERTYnomics: the economic result of path dependence.

1. Clio and the economics of qwerty
(Paul A. David)

2. 1867
C. L. Sholes, a
printer by trade,
helped by his
friends C. Glidden
and S.W. Soule, built
a primitive writing
machine.
1867
J. Densmore, the
promoter-venture
capitalist, struggled
Sholes to perfect the
machine. To reduce the
frequency of typebar
clashes, it was
developed a four-row
keyboard similar as the
modern Qwerty.
1873
Qwerty’s evolution was
completed by
Remington’s ( a famous
arms maker) mechanics.

3. 1878
Remington brought
out its Improved
Model Two.
1870’s
Economic downturn
of the 1870’s was not
the best times in
which to launch a
brand new product of
office equipment
costing 125$.
1880’s
The typewrtiter boom
begin.

4. 1879
Crandall was the
second inventor to
reach the American
market.
1892
Blickensderfer first
sported a keyboard
arrangement which
was more sensible
than qwerty. This
“Ideal” keyboard
placed in the bottom
row the most
commonly used
letters, DHIATENSOR
1895-1905
During this period the
main producers of
typewriters offered the
Universal as an option
of the Ideal keyboard.

5. 1940
Us Navy
experiments had
shown that the
increased efficiency
obtained with dsk
would amortize the
cost of retraining a
group of typists
within ten days.
1936
A. Dvorak patented
the DSK (dvorak
simplified keyboard).
2005
Barbara Blackburn
earned the fastest typist
Guinness Wolrd Record
typing 150wpm for 50
minutes.

7. Here the answer to the question: «Why does the
entire world use the most inefficient keyboard?»

8. Is the requirement for system compatibility
between keyboard "hardware" and the
"software" represented by the touch typist's
memory
There aren’t
learning
costs for
industries
The most
part of
typewriters
use QWERTY
Typists use
what they
usually use
QWERTY is
universal

9. AC= TC
Q
The raise of QWERTY’s users reduce
production costs
In a world where typists haven’t any
preference about which kind of keyboard to
use and typewriter producers follow typist’s
preference, a typist will probably choose the
same keyboard chosen by the precedent
typist.

10. When the switching costs became extremely
high, nobody will change his production to
offer a typewriter with an alternative keyboard
Sorry, Do you
have a PC with
AZERTY
keyboard?
No, I don’t.
Only
QWERTY
No
problem!
I’ll take
QWERTY

11. “A path dependent sequence of economic changes is one of
which important influences upon the eventual outcome can be
exerted by temporally remote events, including happenings
dominated by chance elements rather then the systematic
forces.” (P. David)

12. No value judgment is involved unless one says
something like “efficiency is good” or “a more efficient
outcome is a favourite outcome”.
We believe that individual preferences tought to count in
deciding what economic outcomes are preferable.
IF WHAT IS “EFFICIENT” IS
DEFINED AS WHAT THE
“PEOPLE PREFER”, HOW
COULD WE NOT BE FOR IT?

13. In the typewriter case, one may able to argue that, a keybord
layout that is able to unambiguously deliver a faster typing
speed would definitely be preferred by everyone concerned
BUT…
◦ In deciding matters of efficiency, THE DISTIBUTION OF
GAINS BETWEEN INDIVIDUALS IS NOT RELEVANT!
This judgment may be couched in Pareto efficiency terms by
nothing that the truly “superior” keybord would be able to
deliver cost savings in excess of the losses suffered by those
wedded to an “inferior” one.

14. Equilibrium is closely connected to the concept
of efficiency.
The whole process is driven by differences in opinion and perception
between rival producers and enterpreneurs.
Where people have different expectations about the same situation, at
most one of them can be right.
◦ Equilibrium values might depend on the path taken to get to
equilibrium.
And to quote Tolstoy:
“(e) very action of theirs, that seems to them an act
of their own free will, is an historical sense not free
at all, but in bondage to the whole course of
previous history” (War and Peace)

15. Path dependence gains added relevance because it’s seen to
attach to system that exhibit network-effects.
◦ The fact that the benefits of being in the network
depend on how many individuals already belong among
competing networks, whichever gets started first may
foreclose the development of the others simply by virtue
of being there first, and not from any economic merit.
This could then be seen as a “market failure”… a failure of
the market to unfailingly deliver the “best” standard.
The lock-in may or may not be a problem. It’s only a problem
if we become locked-in to an inferior standard.

16. It is impossible to know how keyboard’s writers
will change their behaviors, but we can only know how the market
will be following this way.
 Pro:
 continuing to use a inefficient standard (instead of using
Dvorak technology that is more efficient and faster than
QWERTY)
 Against:
 QUERTY is efficient (the cost of retraining for DSK is too
expensive)

17. Can we imagine a keyboard’s market without the path-dependence ?
No cost of rertaining
Competitive Market

18. INDUSTRY RIVALRY
(Medium)
• High concentration (competitors: Azerty;
QWERTZ; DSK; Dhiatensor)
• Low diversity of competitors
• Low product differentiation
• Similar cost conditions
BUYER POWER
(High)
• High price sensitivity
SUPPLIER POWER
(No)
• in this case we can assume a vertical backward
integration
THREAT OF ENTRY
(High)
• High economies of scale
SUBSTITUTE
COMPETITION
(Low)
• Low buyers’propensity to substitute
• Low substitution rate
No path-
dependence

19. Industy
Rivality
(Medium)
Buyer
Power
(High)
Sobstitute
Competition
(Low)
Supplier
Power
(No)
Threat of
Entry
(High)