Download Competition, Innovation and the Microsoft Monopoly: by Thomas M. Lenard (auth.), Jeffrey A. Eisenach, Thomas M. PDF

By Thomas M. Lenard (auth.), Jeffrey A. Eisenach, Thomas M. Lenard (eds.)

Do the antitrust legislation have a spot within the electronic economic climate or are they out of date? that's the query raised via the government's criminal motion opposed to Microsoft, and it's the query this quantity is designed to respond to.
America's antitrust legislation have been born out of the commercial Revolution. rivals of the antitrust legislation argue that no matter what advantage the antitrust legislation can have had some time past they've got no position in a electronic economic system. quick innovation makes the buildup of industry strength virtually most unlikely. Markets swap too fast for antitrust activities to take care of. And antitrust treatments are necessarily regulatory and accordingly threaten to `regulate business'.
a unique view - and, in general, the view provided during this quantity - is that antitrust legislation can and does have a tremendous and optimistic function to play within the electronic economic climate. The software program enterprise is new, it truly is complicated, and it's speedily relocating. research of industry definition, contestibility and strength festival, the function of innovation, community externalities, rate constructions and advertising and marketing channels current demanding situations for teachers, policymakers and judges alike. comparing patron damage is tricky. Distinguishing among unlawful behavior and brutal - yet valid - pageant is usually tricky.
Is antitrust research as much as the problem? This quantity means that antitrust research `still works'. In stark distinction to the political rhetoric that has surrounded a lot of the controversy over the Microsoft case, the articles provided the following recommend neither that Microsoft is inherently undesirable, nor that it merits a de facto exemption from the antitrust legislation. as a substitute, they give insights - for policymakers, courts, practitioners, professors and scholars of antitrust coverage all over - on how antitrust research could be utilized to the company of constructing and advertising and marketing desktop software.

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Extra resources for Competition, Innovation and the Microsoft Monopoly: Antitrust in the Digital Marketplace: Proceedings of a conference held by The Progress & Freedom Foundation in Washigton, DC February 5, 1998

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For example, under some conditions these practices can be used by a firm that is dominant in one market to tip the market for a related product in its direction, even if its variant of that product is an inferior one. Network effects also result in compatibility being a critical dimension of industry structure and conduct. When two programs can communicate with one another and/or be used with the same complementary system components, they are said to be compatible. With compatibility, there is one big network and tipping to a single variant is impossible.

Personal computer software markets during the 1980s can accurately be characterized as fluid, with new software categories being established and leadership in several important categories changing hands one or more times. In contrast, personal computer software markets in the 1990s have tended to follow a rather different pattern: Microsoft as an absorbing barrier. 38 Competition, Innovation, and the Microsoft Monopoly This pattern suggests - but does not prove - that network effects are large enough that the lock-in they create may be greater than the force of technological change.

Both companies entered into consent decrees with the Department of Justice to settle antitrust charges. Despite the fact that these issues have been around for decades, some commentators have opined that existing federal antitrust policy is based on outdated economic theory which is inapplicable to modem software markets. * We would like to thank Ed Dale, Timothy Muris, Steven Salop, and Hal Varian for useful comments and suggestions 30 Competition, Innovation, and the Microsoft Monopoly Self-styled crusader Gary Reback, for example, has asserted that "[r]ight now the antitrust division is being held hostage by economists," which he apparently believes is a bad thing.

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