Neuromancer

A detailed Summary of Neuromancer

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 alte

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.

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.

rnative'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, driv

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Approximate Word count = 1250
Approximate Pages = 5 (250 words per page double spaced)

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