The Macrosoft Case: Analysizing From The Aspect Of Network Economy

The Microsoft case attracts the worldwide attention. Because the software industry which the Microsoft corporation belongs to has explicit characteristics of network economy, such as network effects, positive feedback effects, many traditional market structure and antitrust theories aren't fit for the case. This paper analyzes the case from the aspect of network economy.The paper consists of four parts. In the first part of the paper, the author briefly introduces the background including condition of the Microsoft corporation, the formation of the case and economists' opinion about the case to lay a basis for the subsequent theoretic analysis. Using the basic principle of the network economy, the second part emphatically makes analysis of the controversial focus of the case from the perspectives of Critical Mass, positive Feedback Effects, Consumer Expectation, Locking -In & Irreversibiry and Compatibility & Industrial Standard. The third part analyzes the other problems of the case, such as the pricing of the windows, bundling sale, etc. The last part concludes the above analysis and puts forward some positive suggestions.