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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator
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To: Gerald R. Lampton who wrote (23770)1/6/2000 12:24:00 AM
From: Bearded One   of 24154
 
I don't disagree that network effects can be good for consumers. But should the owner of a network effect be allowed to use the network to harm competitors in ways that non-owners of the network cannot do?

To illustrate, suppose prices decline by $1 because of network efficiencies but increase $2 because the dominant provider exploits its competitive edge. No consumer would join that network, but the extraordinary profits would attract competitors

What if consumers join when the network is beneficial and then cannot leave when the dominant provider later exploits its competitive edge. George Priest neatly ignores the possible cost of changing networks or the possibility that the cost/benefits of a network can change over time.
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