Accumulated skill and falling unit costs make switching to new methods increasingly unattractive

Evidence

The learning effect theory holds that the more often an operation is performed, the more efficiency will be gained with subsequent iterations. The operation becomes more skillfully performed (faster, more reliable, and with less errors), which, in turn, means decreasing average costs per unit of output (Argote, 1999). And the more attractive the chosen solution becomes because of accumulated skills and decreasing cost, the less attractive it is to switch to new learning sites (where the actors would have to start from scratch). Only sticking with the once chosen solution promises continued returns— although, as is well known, the resulting cost curve flattens after a while. — Jörg Sydow, Georg Schreyögg, and Jochen Koch, Organizational Path Dependence, 86

Categorization

• DEFINE: Names and unpacks the learning effect theory as a mechanism, not just a label.
• XREF: The same self-locking dynamic underlies Arthur’s increasing-returns economics and David’s QWERTY lock-in story.