The Microssoft Case 98: Network Effects at Work

Andreas Gr÷hn
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Andreas Gr÷hn: Institute of World Economics, Kiel, Germany

Homo Oeconomicus, 1999, vol. 15, 325-339

Abstract: Microsoft is the dominant player in the PC-software industry and therefore has been under antitrust investigation since 1990. this article analyzes the economics of the Microsoft Case. Most important in the economic analysis of the Microsoft Case are network effects. A thorough analysis of the network effects in the software-industry shows that governmental interventions are not needed in this industry because of the market's contestability. Competitors can develop compatible products and competitive systems. In fact, technical progress might lead to new market structures sooner than government can act.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:hom:homoec:v:15:y:1999:p:325-339

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