ABSTRACT
The rapid development and adoption of microcomputer technology is one of the great success stories of the latter half of the twentieth century. This chapter examines industry conduct, with particular attention to antitrust interest in Microsoft. In markets with technological progress, development of a standard is a moving target. Traditional measures of industry competitiveness might not be as useful in a market that is characterized by network externalities. Information on software firm revenues and employment is necessary to the analysis of industry structure. Software piracy is a significant problem for the industry's future development, and Bill Gates's argument is clearly important. Competing standards in the VCR industry illustrate the importance of market dynamics in industries characterized by product complements as they relate to network externalities. The decision to use copyright for protection of intellectual property in software has had a significant impact on the development of the industry.
