Very interesting that he writes a whole big paper on the subject of "lock-in" and the dot com era without once mentioning branding as a source of competitive advantage for first movers, despite that fact that this is surely where most of those dot com dollars went, and is surely the big difference between the success of Amazon and the failure of the wannabes.
I've always thought that the fact that neoclassical microeconomics doesn't have anything even approaching a decent theory of advertising ought to be a far bigger embarrassment for the profession than it actually is. We're talking about a pretty massive industry here, after all, which by NC standards ought not to exist. dd -----Original Message----- From: Michael Perelman [mailto:[EMAIL PROTECTED]] Sent: 11 June 2002 18:11 To: [EMAIL PROTECTED] Subject: [PEN-L:26709] bad economics and the dot.com meltdown Liebowitz has been a strong opponent of the lock-in thesis; also a recipient of microsoft support for obvious reasons. "Network Meltdown: A Legacy of Bad Economics" BY: STAN J. LIEBOWITZ University of Texas at Dallas School of Management Document: Available from the SSRN Electronic Paper Collection: http://papers.ssrn.com/paper.taf?abstract_id=309879 Date: April 19, 2002 Contact: STAN J. LIEBOWITZ Email: Mailto:[EMAIL PROTECTED] Postal: University of Texas at Dallas School of Management Mail Station JO51 P.O. Box 830688 Richardson, TX 75083-0688 UNITED STATES Phone: 972-883-2807 Fax: 972-883-2818 ABSTRACT: Why did the dot.coms burn and die? The answer is that they followed the advice given to them by a set of economists preaching that being first to market was the key to success thanks to lock-in effects. I explore these events and this thinking in this paper. Keywords: network effects, lock-in, dot.coms, ecommerce, internet -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901 ___________________________________________________ Email Disclaimer This communication is for the attention of the named recipient only and should not be passed on to any other person. Information relating to any company or security, is for information purposes only and should not be interpreted as a solicitation or offer to buy or sell any security. The information on which this communication is based has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. All expressions of opinion are subject to change without notice. All e-mail messages, and associated attachments, are subject to interception and monitoring for lawful business purposes. ___________________________________________________
