Technological Efficiency and Organizational Inertia: A Model of the Emergence of Disruption

  • Authors:

  • Christian Buchta;David Meyer;Alexander Pfister;Andreas Mild;Alfred Taudes

  • Affiliations:

  • Institute of Tourism and Leisure Studies, Vienna University of Economics and Business Administration, Augasse 2–6, 1090 Wien, Austria. christian.buchta@wu-wien.ac.at;Department of Information Systems, Vienna University of Economics and Business Administration, Augasse 2–6, 1090 Wien, Austria. david.meyer@wu-wien.ac.at;Department of Economics, Vienna University of Economics and Business Administration, Augasse 2–6, 1090 Wien, Austria. alexander.pfister@wu-wien.ac.at;Department of Production Management, Vienna University of Economics and Business Administration, Pappenheimg. 35/5, 1200 Wien, Austria. andreas.mild@wu-wien.ac.at;Department of Production Management, Vienna University of Economics and Business Administration, Pappenheimg. 35/5, 1200 Wien, Austria. alfred.taudes@wu-wien.ac.at

  • Venue:
  • Computational & Mathematical Organization Theory
  • Year:
  • 2003

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Abstract

We study the influence of technological efficiency and organizational inertia on the emergence of competition when firms decide myopically. Using a multi-agent computer simulation model, we observe the competitive reaction of a former monopolist to the advent of a new competitor. While the entrant uses a new technology, the monopolist is free either to stick to his former technology or to switch to the new one. We find that—irrespective of details regarding the demand side—a change of industry leadership occurs only if the new (“disruptive”) technology is not too efficient and organizations are inert.