" Judge Jackson's ruling in the Microsoft antitrust trial relied heavily on theories of market "
lock-in," which allege that competition is lax in industries that exhibit increasing returns due to "network effects." WINNERS, LOSERS &
amp; MICROSOFT, first published in 1999,
shows that "lock-in" theories are theoretically flawed and empirically unfounded.
" This revised edition of WINNERS, LOSERS & MICROSOFT includes an extensive analysis of Judge Jackson's findings, showing how they fail to overcome Liebowitz and Margolis's powerful critique of lock-in theory, including the cases of the QWERTY typewriter keyboard, the VHS video tape
format (over the supposedly superior Beta format), and Microsoft's
operating system. It also shows that the proposal to split Microsoft into separate companies (Applications and Operating Systems), and ban them from working together for ten years, would impose costs on consumers, and waste on the industry, while reducing competitive and innovative.
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