In the well-researched and compiled book, Winners, Losers & Microsoft Competition and Antitrust in High Technology authors Stan J. Liebowitz and Stephen E. Margolis discuss a variety of economic theories and challenge some perceived market inefficiencies. They begin their discussion with an explanation as to why certain products stand out in comparison to others. They discuss the value of networking and how it leads to the establishment of standards in the creation and valuation of products. The authors discuss the reasoning as to why certain products succeed while others fail citing the Dvorak keyboard as an example. The authors cites the economic concept of “Path Dependence” to allude to explain why economic efficient trends and products …show more content…
This concept while ironic in nature accurately explains the economic concept that states the company with the best product will have the greatest demand. On one hand this is true. However looking at VHS tapes versus Beta format (higher quality VHS alternative) this was not the case. The authors begin to question, whether this was rather a failure in the market, an outlier? For further evidence the author discusses the QTWY keyboard we have come to know today. The organization of the keys is seemingly random, “Sholes in order to mitigate a problem with the jamming of typing hammers [came up with the key layout]”(12). A Rival keyboard was patented soon thereafter dubbed the, “Dvorak Keyboard” which was as Dvorak argued introduced as a more effective and efficient keyboard laid out to ensure efficiency with keys laid out to increase the speed at which words could be typed. A study was even conducted under the guidance of the government which (while extremely inaccurate and bias, as concluded now) supported Dvorak’s claim that this keyboard was in fact more efficient. However, looking around today, we don’t use the Dvorak keyboard. Thus leading to negate the fact that the market tends toward the more efficient product. The reason behind this logic highlights the role of networking and standards in customer preference in the development of the …show more content…
However, networking as an economic term means something a slightly different. The Networking effect refers to convergence of, “compatibility, conformity, or certain other kinds of interactions”(4) which help to promote widespread usage leading it to become a standard. When something becomes a standard it become the predominant product. This means that it is the universally used standard. In the case of the QTWY keyboard, being the only available keyboard at the time of its emergence into the market it became the standard. With respect to firms, this can be explained by the fact that when there is a larger firm who holds a monopoly, and a smaller firm seeks to enter, the barriers surrounding it are high. For example if a smaller computer company were to emerge rivaling Microsoft, it would be extremely difficult for it to enter the market and compete with it on any viable level due to the high monetary costs surrounding research, production, advertising etc. This makes it hard to effectively enter a high cost market. While the later example with keyboards is not as high cost, the standardization makes it practically
The United Sates v. Microsoft anti trust case was based on the United Sates Justice Department’s assertion that Microsoft was monopolizing the software industry and making it too difficult for competitors to engage in the industry. Specifically, they were focused on the fact that Microsoft included software for their own web browser, Internet Explorer, with the purchase of each Microsoft PC. The plaintiff claimed that this was unfair to competing web browsers such as Netscape. The Justice Department had already had issues with Microsoft’s business practices prior to the 1998 anti trust case.
Monopoly is explained by being the only seller of something. Monopolies have the ability to price their product at any price on the demand curve. This becomes an issue because monopolies are more focused on maximizing their own profits
For example, the author argues that increased power for the ISP’s would hurt the value of the internet. Yet the authors also admits that in most cases, businesses don’t have a reason to discriminate since innovation is what drives the internet’s growth, which in turn helps the ISP’s grow their
Many of Bryan’s anti monopolist policies were rooted in the values instilled within him during his childhood. William Jennings Bryan was born in the small town of Salem, Illinois on March 19, 1860, to Silas Bryan and Mariah Elizabeth Jennings Bryan. Just 6 years later, Bryan and his family moved to a farm area just north of Salem. As a result, Bryan grew up with the influences of a farming community surrounding him. As those around him were farmers as well, he was made aware of the many issues that farmers faced.
All in all, week 6 has provided with some insights on how firms operate whether they are in a competitive or monopolistic market. 1. Why will
Customer perceptions of
Customization of Products or Services Discussion Board 1 Initial Thread James Tompkins Liberty University Key Concept Explanation Customization in industry is simply the offering of a product or service suited exactly to the customer’s desires, needs, or specifications. While this sounds as simple as “give the customer what they want,” a myriad of issues in flexibility, ability, adaptability, transparency, and profitability exist that can dilute the attraction to customization by a firm. Companies are discovering that they can elevate customer loyalty and engagement by utilizing customization to boost sales and gain market share by fulfilling the customer’s desire (Spaulding & Perry, 2013). In general, customers who buy customized
Anti- trust Laws of United states Antitrust law United States antitrust laws are referred to as competition laws. These laws are enforced by the government to protect consumers from vulturous business practices and ensuring that a clean competition exists in the open market economy. Congress was the first to pass the anti-trust law, the Sherman Act was the first law to be passed in the year 1890 as a comprehensive character of economic liberty which aims to preserve free and unfettered competition as a rule of the trade. In the year 1914 two more additional antitrust laws were passed by the congress: The Federal Trade Commission Act and the Clayton Act. These are the three core federal act which are being in effect today.
Professor White views antitrust from the prospective of “property rights and corrective justice.” Antitrust, says White, draws heavily from utilitarianism, the school of ethics that maintains that the right action to be taken is the one that produces the greatest amount of utility for the greatest number of people.” Professor White argues that this approach is misguided. Instead, individual and property rights should trump antitrust utilitarianism. Professor White contends that antitrust ignores the right of people to control their property.
Market Structure - Oligopoly Oligopoly is a market structure whereby a few number of firms owns a lion’s share in the market. This market structure is similar to monopoly, except that instead of one firm, two or more firms have control in the market. In an oligopoly, there are no upper limits to the number of firms, but the number must be nadir enough that the operations of one firm remarkably influence and affects the others (Investopedia, 2003). The Walt Disney Company is categorized under an oligopoly market structure.
The introduction of the new optical computer technology, Neutron, provided Quasar Computers with a patent or an exclusive right to the inventor that exclude others from making, selling, or using the invention for a period of time (General Information Concerning Patents, n.d.). Therefore, it allows Quasar Computers to operate in a monopoly market with absent of absolute barriers to entry from its competitors and is the only firm that can use the all-optical technology in the market. As a result, the firm is able to restrict output and raise prices to maximize its profits (Monopolistic Market, 2015). Study showed that the maximization of profit in monopoly market is when the production output level where the marginal cost (MC) is equal to the marginal revenue (MR) (Posner & Landes, 1981).
This is where the relationship between provider and customer steps in and brand name plays major role in helping to “seal the
Introduction This paper analyzes how apple positioned itself to take advantage of unique designs to attract sufficiently large niche market to surpass competition in US and China.in addition, evaluate apple's experience in strategic alliance. Apple, Inc. was founded by Steven Paul Jobs, Steve Wozniak and Ronald Gerald Wayne on April 1, 1976 and is headquartered in Cupertino, CA. The company designs, manufactures, and markets mobile communication and media devices, personal computers, portable music players, besides, sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The company sells its products worldwide through their retail stores, online stores, and direct sales force and third party cellular network carriers There is no doubt Apple bring newness and innovation with each of its product.
In some situations, conflict can be more constructive than destructive. In this paper we take a look at two technology giants,
This market usually exists when there is only one firm in the sector/industry. A monopoly usually has no close substitutes. For example: a local electricity company, or a railway service in a city. In order for these firms to be able to maintain their monopoly