The book is a pleasure to read, in no small part because Liebowitz and Margolis serve up course after course of exquisite historical and institutional detail. I will say no more on this topic here, so as not to take the edge off the authors' accounts of the creativity and ingenuity displayed by both suppliers and consumers in the competitive battle for critical mass. The fascinating history and analysis in Winners, Losers and Microsoft can guide us toward a better understanding of the newer forms of competition that have been mainly responsible for the success of the modern American economy in recent decades. The book also contains compelling new evidence on competition in computer software application markets. Winners, Losers and Microsoft will be an extremely important and useful book.
Path dependency is important because it influences the development of many firms and markets.
The economic interpretation to be placed on path dependency, however, is subtle. Liebowitz and Margolis counsel against the readiness with which many economists ascribe inefficiency to path dependency. Because the reference condition of a hypothetical ideal can never be implemented, the relevant, comparative institutional standard for judging efficiency is always in relation to feasible alternatives. This is a recurrent theme. A few pages taken from the book to answer the question that lies at the heart of the Microsoft trial.