An Economist's Guide to U.S. V Microsoft

UC Berkeley, Center for Competition Policy Working Paper No. CPC01-19

39 Pages Posted: 17 Feb 2004

See all articles by Richard Gilbert

Richard Gilbert

University of California, Berkeley - Department of Economics

Michael L. Katz

Haas School of Business; University of California, Berkeley - Department of Economics

Date Written: February 2001

Abstract

We analyze the central economic issues raised by U.S. v Microsoft. Network effects and economies of scale in applications programs created a barrier to entry for new operating system competitors, which the combination of Netscape Navigator and the Java programming language potentially could have lowered. Microsoft took actions to eliminate this threat to its operating system monopoly, and some of Microsoft's conduct very likely harmed consumers. While we recognize the risks of the government's proposed structural remedy of splitting Microsoft in two, we are pessimistic that a limited conduct remedy would be effective in this case.

Keywords: Microsoft, antitrust policy, monopolization, predation, network effects

JEL Classification: L12, L41, K21

Suggested Citation

Gilbert, Richard J. and Katz, Michael L., An Economist's Guide to U.S. V Microsoft (February 2001). UC Berkeley, Center for Competition Policy Working Paper No. CPC01-19, Available at SSRN: https://ssrn.com/abstract=502822 or http://dx.doi.org/10.2139/ssrn.502822

Richard J. Gilbert (Contact Author)

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

Michael L. Katz

Haas School of Business ( email )

Berkeley, CA 94720
United States

University of California, Berkeley - Department of Economics ( email )

579 Evans Hall
Berkeley, CA 94709
United States

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