Theory 31/Competing Rates/Technology
Technology Turns Over on a Ratio
The claim
Whether a technology spreads is set by the ratio of its improvement rate to the obsolescence rate of the incumbent, not by its absolute performance.
01Mechanism
Adoption requires the new option to overtake a moving target; a fast-improving incumbent can hold off a better new entrant.
02Prediction
Adoption should track the ratio.
03Refutation
Adoption tracking absolute performance would remove the moving target.