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The Nash Equilibrium says that if no strategy provides a
benefit to a player given that all other players maintain
their strategies, then that set of strategies and the
payoffs are in a Nash Equilibrium.
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?
Given, one first tracks the industry leaders (not
the customers) to see if planning is taking place
(planning indicates commitment to act), then tracks
the number of installations up to that threshold
(basically, colonization of the niche).
The actions of the customers are an external force
that may prompt the movement in industry and puncture
the equilibrium, ok; but to be really effective, a
stronger force is needed since customers tend to
maximize their local conditions; therefore, aren't
much of a force. Even the Beltway lead initiatives
tend to dissipate without legal teeth.
Without a moral imperative stronger than their
market imperative, it's difficult to predict what
they will do. Of course, when a gorilla enters
the market, things change quickly because the
gorilla can use tactics such as forcing prices
to zero, and then the equilibrium bursts if that
offering is compelling. Free browsers were one
example of that. (Look at the costs of hypermedia
tools prior to Mosaic.)
len
From: Didier PH Martin [mailto:martind@netfolder.com]
I think that XML based domain languages or data structure will reach some success when groups
perceive that they have to reach some form of cooperation in order to
lower the overall costs. A good example of such behavior may be XBRL (1)
in the financial domain. By experience, I discovered that if no external
constrain is applied by a pressure group or by economic constraints,
then people do not behave according to Nash equilibrium and therefore
act as Adam smith creatures and think of their own benefit without
thinking about the overall system. Walter's thesis may be right when
applied to groups behaving in accordance to Adam Smith creatures and may
be wrong in accordance to groups behaving in accordance to Nash's
equilibrium.
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