Microsoft's Pricing of Windows: A Reply to Reddy, Evans, Nichols, and Schmalensee
Despite arguments to the contrary, PCheterogeneity may go a long way towardexplaining why the price ofWindows might be as low as it is.
Does a Platform Monopolist Want Competition?
Abstract We consider a software vendor first selling a monopoly platform and then an application running on this platform. He may face competition by an entrant in the applications market. The platform monopolist can benefit from competition for three reasons. First, his profits from the platform increase. Second, competition serves as a credible commitment to lower prices for applications. Third, higher expected product variety may lead to higher demand for his application. Results carry over to non-software platforms and, partially, to upstream and downstream firms. The model also explains why Microsoft Office is priced significantly higher than Microsoft’s operating system.
An Essay on the Nature and Significance of the Normative Nature of Economics
It is conventional in economics to distinguish between the normative and the positive. The normative has to do with goodness and badness, and with what ought and ought not to be done;1 and the positive has to do with objective description and/or explanation, with what is and with what is necessary given some normative end. The normative has to do with desirability; the positive has to do with truth (in the sense of either descriptive accuracy or serviceability of a means to a given end).2