MSFT Internet Explorer vs. NSCP Navigator Message Board

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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator

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To: Bearded One who wrote (20099)	6/19/1998 1:36:00 AM
From: Gerald R. Lampton	Read Replies (2) of 24154

Maybe that's the Chicago school antitrust argument. Absolutely. 1) Of course consumers have to pay. Microsoft simply raises (or doesn't lower) its prices to cover the cost of the integrated technology. If it's a rational natural monopoly, it s going to charge a monopoly price. By adding more to the product (or tying a competitive product to it), they give consumers more for the same price. 2) A fundamental problem with these anti-antitrust arguments is that they seem to assume an economic model in a vacuum. So true. But this under-pricing of Windows gives Microsoft a lot of room to move its prices around to cover costs of integrating without kicking in competitive forces. If it's priced lower than what competitors can come in under, then it's more efficiently priced as a natural monopoly than if it were a competitive market. My guess is that they price it lower than they could to spread it around and get those network effects and path dependencies going. But they have to charge something if they want people to stick with it.

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