Thomas J. Watson, founder and chief executive officer of IBM, raised the ire of antitrust lawyers at the Justice Department by contracting with lessees to require the purchase of IBM's punched cards for its computing machines. The federal government's antitrust prosecution did not end there. The 1936 antitrust action lead to further prosecution beginning in 1946, and did not end until 1982. Ohio's antitrust legacy continued with Ohio's attorney general battling the Standard Oil Company in Ohio v. Ohio's current attorney general, Betty Montgomery, recently joined 19 other states and the U.S. government in filing a motion against Microsoft in federal court.
People then find themselves stuck with an inferior product and unable to change.
The point of the path dependency argument is that luck supposedly causes an inferior product to defeat a demonstrably superior product. Nobel Prize- winning economist Friedrich Hayek notes that competition is an entrepreneurial process of discovery and adjustment under conditions of uncertainty. Profits are the reward for successful discovery, while losses are the penalty for erroneous decisions. IBM revisited In IBM's case, markets ultimately triumphed over government allegations of monopoly. James A. Damask is the Director of Research for The Buckeye Institute for Public Policy Solutions, a Dayton-based nonprofit, nonpartisan research and education organization of Ohio professors and scholars .