ABSTRACT
Technology adoption in networks suggests that individually rational decisions regarding technologies can, in the presence of network externalities, generate collectively inefficient results (Arthur, 1989). Such a statement would be subject to qualifications if one incorporates adapter (converter) technologies into the adoption problem. Adapters allow previously unattainable network externalities to be captured, in some cases, adapters preclude ‘lock-in’ from ever occurring, in others, previously unpredictable technology adoptions can be predicted with high confidence. These issues dominated historically the late nineteenth-century rift between electric power standards and today governs the evolution of Internet standards.
