Economic and Technical Drivers of Technology Choices: Browsers

The diffusion of new technologies is their adoption by different economic agents at different times. A classical concern in the diffusion of technologies (Griliches 1957) is the importance of raw technical progress versus economic forces. We examine this classical issue in a modern market, web browsers. Using a new data source, we study the diffusion of new browser versions. In a second analysis, we study the determination of browser brand shares. Both analyses let us compare the impact of technical progress to that of economic forces. For browsers, distribution with a complementary technology, personal computers, was a critical economic force. We find that distribution had a larger effect than technical improvements did on browser users' decisions, not only about using the newest browser version (diffusion) but also about brand choice. Because browsers are critical to mass market commercial computing applications, this meant that distribution mattered for the rate and direction of technical change in the entire economy. (This abstract was borrowed from another version of this item.)