Does Microsoft Cause Lower Software Prices?

AngusSF writes "OK, slashdotters, , so is this FEE article Antitrust Benefits Consumers? It Just Ain't So! true?" AngusSF quotes from the article: "... as Stan Leibowitz and Steve Margolis have shown in their book, Winners, Losers and Microsoft, in virtually any market that Microsoft has entered (financial software, spreadsheets, etc.), the effect has been a dramatic reduction in prices and an expansion of output and innovation. Software products that do not compete with Microsoft's products fell in price by 12 percent from 1988 to 1995, but by 60 percent where there was competition from Microsoft.", and writes "I'd really like to see some on-line evidence of this. Has Microsoft competition in office suites really cut prices there?"

Comments

Of course this is true

[michaelggreer]

I am sure that during the initial phase, Microsoft's prices are so low that it drives competitors' prices down too. As with the Xbox, where they use their monopoly rent to pay for losses in the console area. This is called price gouging. Unfortunately. once their competitors are driven out or into niches, do not expect the prices to stay low: there is no longer any market pressure to do so. This is one of the ways monopolies operate.