Many markets have characteristics different to those of the “standard” products one learns about in introductory economics. One of the more interesting facets of the information economy is that some markets can tip: success leads to future success. This happens particularly when a standard is likely to be set. No consumer wants to be left with a technology that doesn’t catch on. It is typically much better to buy a technology that others are investing in as support will be created for that technology. No one wants to have a phone on a unique platform for which no one is bothering to create apps.
Interestingly it is not necessary for any platform/technology to be more popular to tip — it is enough for a platform to be perceived as going to be more popular. Thus, “the aura of inevitability is a powerful weapon….” (Shapiro and Varian, 1999, page 181).
The aura of inevitability ties into politics. Inevitability is often used as a strategy especially in primaries. Hillary Clinton was thought to have adopted such a strategy in 2008. The logic of such an approach is clear when it is used to persuade political insiders. Those who work in politics want to be seen to give early support to the eventual winner/president. Perhaps they will even get jobs working for the winner. Things are less clear when it comes to ordinary voters. While we all probably gain some psychological benefits from supporting a winner these benefits seem a lot smaller than the tangible gains political insiders might get for their early support. This suggests that the aura of inevitability argument works best for super delegates and endorsers in primaries compared to ordinary voters. Endorsements might tip when they reach a certain level but the votes of the average person won’t necessarily.
I am interested to think what other elements of Shapiro and Varian’s great ideas about the information economy apply to politics.
Read: Carl Shapiro and Hal R. Varian (1999) Information Rules, Harvard Business School Press.