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Can we measure Microsoft's market power ?

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  • Christian Genthon

    () (LEPII - Laboratoire d'Economie de la Production et de l'Intégration Internationale - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper has the objective of measuring the market power of Microsoft in the software industry. We develop a two tier arguent. Firstly we estimate the scale economies within the industry. We then make the crude hypothesis that a firm's success in this industry is linked to its size, based on the scale argument. We modelise these assumptions and then compare the expected profits and actual profits genereted by Microsoft. The results tend to show that Microsoft has posted profits in excess of those that such a firm is expected to benefit from if it does not have market power.

Suggested Citation

  • Christian Genthon, 2007. "Can we measure Microsoft's market power ?," Post-Print halshs-00153837, HAL.
  • Handle: RePEc:hal:journl:halshs-00153837
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00153837
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    References listed on IDEAS

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    1. Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-456, June.
    2. repec:cdl:agrebk:677104 is not listed on IDEAS
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    12. Benston, George J & Hanweck, Gerald A & Humphrey, David B, 1982. "Scale Economies in Banking: A Restructuring and Reassessment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 435-456, November.
    13. Bernard Reddy & David Evans & Albert Nichols & Richard Schmalensee, 2001. "A Monopolist Would Still Charge More for Windows: A Comment on Werden's Reply," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(3), pages 273-274, May.
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