From: Peter C. McCluskey (pcm@rahul.net)
Date: Wed Oct 06 1999 - 10:29:12 MDT
rhanson@gmu.edu (Robin Hanson) writes:
>Wei Dai wrote:
>> > what important things that model might be missing?
>>
>>What about the possibility that Microsoft and/or Intel do currently face
>>significant competition or could face significant competition in the
>>future if they don't merge?
>
>What might make a difference would be if merging substantially reduced
>the ability of competitors to contest either the chip or OS market.
>This doesn't sound very plausible to me on first glance, however.
I find it easy to imagine that the merged company would be much less likely
to cooperate with AMD about problems AMD has with running Microsoft software,
and with Linux/FreeBSD developers about problems they have adapting their
software to new chips.
I also wonder how the merged company's influence on legislation would
differ from the current situation.
>are sold by separate monopolists, then P = PX + PY and each
>monopolist does something like
>
> max (PX - CX) * D(PX + PY)
> PX
>
>Where CX is the cost of making X. If the two firms are
>merged, then together they
>
> max (P - CX - CY) * D(P)
> P
>
>This leads to both a lower price P, and more profits. QED.
I don't see how this conclusion follows from the analysis you presented.
-- ------------------------------------------------------------------------ Peter McCluskey | Critmail (http://crit.org/critmail.html): http://www.rahul.net/pcm | Accept nothing less to archive your mailing list
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