Neuromancer Essay, Research Paper
The case against Microsoft is based not just on bad economics, but on a fundamental misunderstanding of government’s decision-making role when it comes to market operations. This misunderstanding has led to an attack on one of the US?s most successful firms.
It is difficult to measure consumer “harms”, much less harms that may only occur in the future. A common misconception about antitrust law is that its purpose is to ensure fair competition. That’s not true; antitrust law’s purpose is to protect consumers. If fair competition maximizes their welfare, so be it; if monopoly maximizes their welfare that?s what the antitrust laws provide for.
It’s not clear that Microsoft has a monopoly in the first place. Past Microsoft customers are not a captive market, as the Department of Justice portrays them. Rather, Microsoft must continue to add features and functionality to its products to get its Windows 95 consumers to become Windows 98 (and beyond) consumers. Consumers are free to change operating systems at any time. There are such alternatives as Linux with the graphic interface, the Mac OS but the point is that even if there were none Microsoft’s ability to raise prices is strictly limited by the mere possibility of such an alternative’s emergence into the market.
Predatory pricing that is, the practice of lowering prices to drive out competition, thus enabling massive price increases later? Well, maybe. There are compelling academic theories that question the possibility of predatory pricing in a free market, but economists universally agree that one component of predatory pricing must be high entry/exit costs. If the competition can enter and exit the market at very low cost, driving them out serves very little purpose, since as soon as you, the monopolist, get around to raising your prices, they’ll come right back in and compete those profits away. The purpose of this discussion of pricing strategy is to show that Microsoft, despite its size, still fears its competitors both the ones it sees now and the ones that don’t exist yet. That is because they aren’t quite confident that they have kept up with consumers’ preferences about how an important tradeoff is to be made.
Microsoft products are similar they represent a certain level of standardization and innovation. This is the source of all the nonsense being bandied about regarding “network effects” that is, the advantage that Microsoft allegedly enjoys because its systems interact more efficiently with one another than with other firms’ applications. It is just a side effect of Microsoft’s choosing standardization over innovation a corporate strategy they should be free to pursue.
It is perfectly legitimate for consumers to express their preferences about the best way to make this tradeoff; indeed, they do so every day, with their money. It is inappropriate, however, for the government to substitute its judgment of how the standardization-innovation tradeoff should be made for that of the market. Why? Because the market is simply better equipped to make such decisions. Basic economics tells us that prices convey information to firms more efficiently than any other information mechanism. Joel Klein and the other attorneys at the Department of Justice cannot, practically by definition, make informed choices about how to make the various tradeoffs in the software industry. For them to try to do so demonstrates not just hubris but ignorance.
And that, at bottom, is the issue in the Microsoft trial. It is not about whether Microsoft is a nice company or whether Bill Gates is a nice person. It is about whom gets to make decisions on how software is made and sold. Do firms get to make those decisions, informed by consumer preferences? Or does the government do so with its well-documented susceptibility to private interests? I think the answer is clear.
Bibliography
The case against Microsoft is based not just on bad economics, but on a fundamental misunderstanding of government’s decision-making role when it comes to market operations. This misunderstanding has led to an attack on one of the US?s most successful firms.
It is difficult to measure consumer “harms”, much less harms that may only occur in the future. A common misconception about antitrust law is that its purpose is to ensure fair competition. That’s not true; antitrust law’s purpose is to protect consumers. If fair competition maximizes their welfare, so be it; if monopoly maximizes their welfare that?s what the antitrust laws provide for.
It’s not clear that Microsoft has a monopoly in the first place. Past Microsoft customers are not a captive market, as the Department of Justice portrays them. Rather, Microsoft must continue to add features and functionality to its products to get its Windows 95 consumers to become Windows 98 (and beyond) consumers. Consumers are free to change operating systems at any time. There are such alternatives as Linux with the graphic interface, the Mac OS but the point is that even if there were none Microsoft’s ability to raise prices is strictly limited by the mere possibility of such an alternative’s emergence into the market.
Predatory pricing that is, the practice of lowering prices to drive out competition, thus enabling massive price increases later? Well, maybe. There are compelling academic theories that question the possibility of predatory pricing in a free market, but economists universally agree that one component of predatory pricing must be high entry/exit costs. If the competition can enter and exit the market at very low cost, driving them out serves very little purpose, since as soon as you, the monopolist, get around to raising your prices, they’ll come right back in and compete those profits away. The purpose of this discussion of pricing strategy is to show that Microsoft, despite its size, still fears its competitors both the ones it sees now and the ones that don’t exist yet. That is because they aren’t quite confident that they have kept up with consumers’ preferences about how an important tradeoff is to be made.
Microsoft products are similar they represent a certain level of standardization and innovation. This is the source of all the nonsense being bandied about regarding “network effects” that is, the advantage that Microsoft allegedly enjoys because its systems interact more efficiently with one another than with other firms’ applications. It is just a side effect of Microsoft’s choosing standardization over innovation a corporate strategy they should be free to pursue.
It is perfectly legitimate for consumers to express their preferences about the best way to make this tradeoff; indeed, they do so every day, with their money. It is inappropriate, however, for the government to substitute its judgment of how the standardization-innovation tradeoff should be made for that of the market. Why? Because the market is simply better equipped to make such decisions. Basic economics tells us that prices convey information to firms more efficiently than any other information mechanism. Joel Klein and the other attorneys at the Department of Justice cannot, practically by definition, make informed choices about how to make the various tradeoffs in the software industry. For them to try to do so demonstrates not just hubris but ignorance.
And that, at bottom, is the issue in the Microsoft trial. It is not about whether Microsoft is a nice company or whether Bill Gates is a nice person. It is about whom gets to make decisions on how software is made and sold. Do firms get to make those decisions, informed by consumer preferences? Or does the government do so with its well-documented susceptibility to private interests? I think the answer is clear.
Другие работы по теме:
Microsoft Essay Research Paper Microsoft has had
Microsoft Essay, Research Paper Microsoft has had a couple of though months since July last year, when Judge Thomas Jackson ordered the company to break up in two. However, since the beginning of this year things have just looked better for Microsoft.
I Am Daivd Essay Research Paper I
I Am Daivd Essay, Research Paper I Am David is written by Anne Holm and is about a boy called David. David is a twelve year old boy who has spent his life in a concentration camp. One day a man from the camp helps him to escape. He is told that he must go north until he comes to Denmark. He doesn’t know what life is like outside the camp and is constantly scared in case he gets caught.
Untitled Essay Research Paper I messed up
Untitled Essay, Research Paper I messed up; I made a mistake, But please, haste do not take. I love you more than any action or words could ever express, Still I find my heart drowning in loneliness.
BDSM Essay Research Paper BDSMBDSM stands for
BDSM Essay, Research Paper BDSM BDSM stands for Bondage Discipline Sadism and Masochism. Most regard this as a perverted form of sexuality limited only to gays who they also regard
Law Suit Essay Research Paper NegligenceThe topic
Law Suit Essay, Research Paper Negligence The topic that will be discussed in this paper is negligence. Negligence is any conduct which creates an unreasonable risk of foreseeable harm to another. There has to be risk involved in the case in order for there to be negligence. Therefore, if there is no risk involved, then there is no case for negligence.
Multi Strand Science Essay Research Paper NAME
Multi Strand Science Essay, Research Paper NAME: DUE DATE: YEAR 12 MULTI-STRAND SCIENCE Choose ONE of the following local industries and prepare a resource management case study for that industry.
Gag Order Essay Research Paper Gag Order
Gag Order Essay, Research Paper Gag Order – A judge’s order prohibiting the attorneys and the parties to a pending lawsuit or criminal prosecution from talking to the media or the public about the case. The supposed intent is to prevent prejudice due to pre-trial publicity which would influence potential jurors.
Dred Scott Case Essay Research Paper The
Dred Scott Case Essay, Research Paper The Dred Scott case is one of the most significant cases in American history. Dred Scott was a former slave of a master named, Peter Blow. When Mr. Blow became financially in trouble he sold Dred Scott to Dr. John Emerson who was a physician. The military career of Dr. Emerson he traveled to many places including Illinois which at the time it was prohibited to own a slave which was stated in the Missouri Compromise of 1820.
Sir Lanval Essay Research Paper Intro paragraph
Sir Lanval Essay, Research Paper Intro paragraph: A warrior is a person that values his country and will protect it at all costs. He is brave and valient and does not care whether he dies in battle just as long as he’s fighting for his country and for a good cause. Sometimes warriors sacrifice their beliefs in the case of love or religion.
Nath Essay Research Paper Nathaniel Hawthornes short
Nath Essay, Research Paper Nathaniel Hawthorne?s short stories ?The Birthmark? and Rappaccinni?s Daughter are both tragic tales of women being taken advantage of. In each account a young woman is skillfully led to her downfall by a loved one she trusts. In each case Hawthorne includes an inconceivable innocence about the woman.
Bc Speech Assignment Essay Research Paper Research
Bc Speech Assignment Essay, Research Paper Research Assignment #4 Your fourth speech is a research-based persuasive speech. Since your primary goal will be to convince your audience to take a specific action your research burden is higher. Your research is due via email on the date listed on your course schedule.
Twelve Angry Men Essay Research Paper Twelve
Twelve Angry Men Essay, Research Paper Twelve Angry Men This play is about twelve jurors who are to decide the verdict of a 19 year old boy who is accused of killing his father. The jurors go into a room with the foreman to talk about the case and decide on a verdict. The vote has to be unanimous either guilty or not guilty for the case to end.
Comparative Essay Neuromancer And The Time Machine
Essay, Research Paper A common tool of science fiction writers is the use of a character, to whom the reader can relate, placed in an alien setting. This character will represent the reader in this new alien world or society, allowing the reader to form a link between his or her own world and this new one. Because these characters are placed in unfamiliar settings, a way is presented to defamiliarize our own society and perhaps even look at it in a new way, or from a new angle.
12 Angry Men Essay Research Paper English12
12 Angry Men Essay, Research Paper English: 12 angery men essay 2000-07-15 12 Angry Men Paper The jury member I chose to do my paper on was Mr. Davis (the member who voted not guilty first), because he used many task messages, did not allow physical factors to affect his decisions, and was a successful emergent leader at some points in the case.These three points made Mr.
Son Of Sam Essay Research Paper David
Son Of Sam Essay, Research Paper David Berkowitz in whom he?d like to call himself the ?Son of Sam?. ?Sam? was a 6,000-year-old man inhabiting the body of a neighbor, Sam Carr. David also believed that Sam ordered him to kill. He also believed that Sam Carr?s dog ordered him to kill.
Jfk Assassination Essay Essay Research Paper JFK
Jfk Assassination Essay Essay, Research Paper JFK Assassination Essay Travis AP US 1 04/22/01 Is there enough information in the case of the Assassination of John F. Kennedy to assume it a conspiracy? There is much that can be brought into play to say that there not only was more than one shooter, but that also, Lee Harvey Oswald, was not the man to have done the real shooting anyway.
Marriage Easy Divorce Essay Research Paper Marriage
Marriage: Easy Divorce Essay, Research Paper Marriage: Easy Divorce Although I do not agree with getting married until you are positive that you want to have a huge commitment to another person, I favor the easier divorce.
William Gibson
’s Neuromancer: Cyberspace Essay, Research Paper William Gibson’s Neuromancer: Cyberspace As described by William Gibson in his science fiction novel Neuromancer,
Clinton Essay Research Paper Whether or not
Clinton Essay, Research Paper Whether or not to have the trial be held in public or private, symbolizes the trial. A simple question that is answered by common sense, made to just prolong a trial that serves no purpose, but to explain the bungling of two parities walking in the dark. At this stage in the proceeding there is nothing left to deliberate, no posturing left to do.
Media Essay Research Paper Media AwarenessThe case
Media Essay, Research Paper Media Awareness The case that I decided to focus on is an older abuse case, but it has recently been resolved in the courts. It is a child abuse case involving James and Bonnie Zeleski. They
The Safety Inspector Essay Research Paper The
The Safety Inspector Essay, Research Paper The Safety Inspector Mr. Redos, I am an inspector for the OSHA. I have noticed the following safety objects missing in the room F 203, chemistry room. These are sprinklers,
Fairness Of Jurors Essay Research Paper MUST
Fairness Of Jurors Essay, Research Paper MUST A JUROR’S MIND BE EMPTY TO BE OPEN?This article is about a concept of choosing the 12 jurors. In any case, jurors always play important roles in the court since they are the people who will come up with a verdict. Because of this, people believe that when the jurors are chosen for a certain trial, they must be aware of that case and know what is going on in that case.
The Canadian Senate Essay Research Paper The
The Canadian Senate Essay, Research Paper The Canadian Senate By Andrew Donogh Today the Canadian Senate does not do all that much for the Canadian government. It no longer does the job that it was created to do. It barely
Buddhist Economics Essay Research Paper Buddhist EconomicsMost
Buddhist Economics Essay, Research Paper Buddhist Economics Most people think that religion and economics don?t mix. So you would think the same in the case with Buddhism and economics. But actually the there is a set of rules that go along with our modern day economics that have their own meanings. Buddhists believe that spiritual health and well being go hand in hand.
Neuromancer By William Gibson Essay Research Paper
When Neuromancer by William Gibson was first published it created a sensation. Or perhaps it would be more precise to say that it was used to create a sensation, for Bruce Sterling and other Gibson associates declared that a new kind of science fiction had appeared which rendered merely ordinary SF obsolete.
Bob White Essay Research Paper Shariff Elkordy
Bob White Essay, Research Paper Shariff Elkordy 11/27 Professor Lang A case of negative impact: Bob White v. Texas After reading this article, I was surprised that this injustice happened in the United States not to long ago. Bob White had many of his civil rights violated. He spent seven days in jail with no charges being held against him.
Hw Lab Essay Research Paper I TitlePopulation
Hw Lab Essay, Research Paper I. Title Population Genetics and Evolution: Hardy Weinberg Equation II. Hypothesis This lab is separated into four different cases. Within each of these cases, there are
Case Study Essay Research Paper Case Study
Case Study Essay, Research Paper Case Study : Media ups and downs Summary: The Australian made midday television program ?Day time with Amanda? first aired in 1993, showing good ratings and high advertising revenue during its early stages.