Software upgrades: More harm than good
d...@temple.edu
> Rather than do it through taxes and let the government decide what to
> spend my income on, how about letting me keep the money? Then, if I
> want to get the linux software, or even the Word upgrade, I can do so.
> If I don't want either one of those things, I can spend the money on the
> things I do want.
The point is that you _must_ buy the Word upgrade, if you want to
communicate with other people. That's the negative externality that
needs correcting.
Gambit wrote:
> Yes, for sure, but at least it will be public-domain, i.e. owned by
> everybody, not a tentacular corporation.
I have nothing against corporations. But software production has high
economies of scale (marginal cost ~0) so again government intervention
may be justified on "natural monopoly" grounds.
tonyp wrote:
> I'd vote for laws against _stupidity_ though.
Hear, hear!
SUSUPPLY wrote:
> I hope you're happy Dan, now that you've brought out the planned obsolescence
> quacks.
Oops. Didn't realize they were out there.
> Anyway, I decided to run the above past my computer consultant, and
> here is what he had to say:
>what he describes as a Microsoft practice is
> common for this industry.
True. Bill Gates was a convenient personification.
> I do not know if this practice is a cleverly designed and concealed
> marketing planned obsolescence tactic, or just the nature of compiling more
> advanced computing programs
Me neither. At this point, I suspect the former.
People like your economist
> friend have little obvious appreciation for the magnificence of today's
> products
No, I like what they can do.
> compared even to last year's versions
Correct. I see little useful improvements at this point.
The basic question is:
do the marginal benefits (more bells and whistles) of upgrades outweigh
the marginal social costs ($ spent AND creating incompatibility).
Dan
in Philly
SUSUPPLY
>Jimmy wrote:
>> Rather than do it through taxes and let the government decide what to
>> spend my income on, how about letting me keep the money? Then, if I
>> want to get the linux software, or even the Word upgrade, I can do so.
>> If I don't want either one of those things, I can spend the money on the
>> things I do want.
>
>The point is that you _must_ buy the Word upgrade, if you want to
>communicate with other people. That's the negative externality that
>needs correcting.
Just what is your definition of externality? If you want a benefit, shouldn't
you expect to pay for it?
>Gambit wrote:
>> Yes, for sure, but at least it will be public-domain, i.e. owned by
>> everybody, not a tentacular corporation.
>
>I have nothing against corporations. But software production has high
>economies of scale (marginal cost ~0) so again government intervention
>may be justified on "natural monopoly" grounds.
Except that in the Microsoft case the usual evidence of "natural monopoly" is
missing.
[snip]
>SUSUPPLY wrote:
>> I hope you're happy Dan, now that you've brought out the planned
>obsolescence
>> quacks.
>
>Oops. Didn't realize they were out there.
Well, I'll let you decide. Later you write:
>> I do not know if this practice is a cleverly designed and concealed
>> marketing planned obsolescence tactic, or just the nature of compiling more
>> advanced computing programs
>
>Me neither. At this point, I suspect the former.
[snip]
>The basic question is:
>do the marginal benefits (more bells and whistles) of upgrades outweigh
>the marginal social costs ($ spent AND creating incompatibility).
>
>Dan
>in Philly
The market says they do.
Patrick
d...@temple.edu
> >The basic question is:
> >do the marginal benefits (more bells and whistles) of upgrades outweigh
> >the marginal social costs ($ spent AND creating incompatibility).
SUSUPPLY wrote:
> The market says they do.
Unless people are forced to buy the upgrades in order to communicate
with others.
Put it this way: suppose Office Suite 2000 is no better than Office
Suite 97 (which I think is the case). Then why would anyone buy it?
Because: 1)if you bought a new computer and you want to send/receive
files with all the others using MS, you gotta buy it. 2)if you already
have Suite 97 but you keep receiving files from the 2000 people, you
have to buy 2000 too.
Maybe the following would be an acceptable "free market" solution:
require software firms to continue selling older versions of all
software, even when their new versions go on sale.
Dan
in Philly
SUSUPPLY
>Put it this way: suppose Office Suite 2000 is no better than Office
>Suite 97 (which I think is the case).
You aren't making too good an impression on my consultant, he says:
<< People buy upgrades because they like and want the improvements. Many, like
me, actually look forward to upgrade releases. When I get a new piece of
software, no matter how good it is, there are always improvements I would like
to see. It is the nature of the beast. The firms that really do a good job of
designing and marketing software go to great lengths to learn what customers
need and want, and add those features and functions in new releases. Customers
are always eager to obtain the software with such improvments and that is a
major factor driving the market. He reveals his complete lack of knowledge on
this subject when he states Office 2000 is no better than previous versions.
That is because he either does not know how to use the product features, or is
too damned arrogant to admit he is ignorant of them.
<< No one HAS to buy Microsoft Word. Word Perfect and others are still in
business, and there are many users of this product who swear that Word Perfect
IS perfect. They would have nothing else. These users don't go out and switch
to Microsoft Word in order to exchange documents with Word users. They, unlike
this naieve or poorly informed critic, learn to use the features provided in
the product. I can tell from his commentary that he knows very little about the
capabilities and functions of Word, or probably any other word processor.
<< What this guy needs is to take a training course in the use of Microsoft
Word so he could learn to use it!
> Then why would anyone buy it?
>Because: 1)if you bought a new computer and you want to send/receive
>files with all the others using MS, you gotta buy it. 2)if you already
>have Suite 97 but you keep receiving files from the 2000 people, you
>have to buy 2000 too.
And the consultant continues:
<< Pat:
<< Some additional points about Word just for your information. Bring up Word
and in the menu click FILE, SAVE AS. At the bottom of the "Save as" window,
click the down arrow assocaited with the "Save as type" box. There you will see
how Microsoft has provided downward capability for its own products, and the
ability to save documents in formats for its biggest word processor competitor,
Word Perfect. Morevover, a document can be saved in "Rich Text Format" (with a
.rft extension) or plain text format (.txt), such a document is upward,
downward and "sideways" compatible. Any version of any word processor can read
it. There are few, if any other programs, except Word Perfect, that provide
such flexibility. >>
con...@inow.com
> > Dan writes:
> > >The basic question is:
> > >do the marginal benefits (more bells and whistles) of upgrades outweigh
> > >the marginal social costs ($ spent AND creating incompatibility).
>
> SUSUPPLY wrote:
> > The market says they do.
>
> Unless people are forced to buy the upgrades in order to communicate
> with others.
>
> files with all the others using MS, you gotta buy it. 2)if you already
> have Suite 97 but you keep receiving files from the 2000 people, you
> have to buy 2000 too.
I believe the term they use for it is "innovation."
John
--
John Conover con...@inow.com http://www.johncon.com/
631 Lamont Ct. Tel. 408.370.2688 http://www.johncon.com/ntropix/
Campbell, CA 95008 Fax. 408.379.9602 http://www.johncon.com/nformatix/
con...@inow.com
Its a bit off subject, but I just tried StarOffice 5.1 on Linux, and
was pleasantly surprised. I thought it was quite good. Very MS'y.
Bear in mind that I am a TeX bigot, so it is quite a complement to
the SO team.
John
susu...@aol.com writes:
> Dan writes:
>
> >Put it this way: suppose Office Suite 2000 is no better than Office
> >Suite 97 (which I think is the case).
>
> You aren't making too good an impression on my consultant, he says:
>
> << People buy upgrades because they like and want the improvements. Many, like
> me, actually look forward to upgrade releases. When I get a new piece of
> software, no matter how good it is, there are always improvements I would like
> to see. It is the nature of the beast. The firms that really do a good job of
> designing and marketing software go to great lengths to learn what customers
> need and want, and add those features and functions in new releases. Customers
> are always eager to obtain the software with such improvments and that is a
> major factor driving the market. He reveals his complete lack of knowledge on
> this subject when he states Office 2000 is no better than previous versions.
> That is because he either does not know how to use the product features, or is
> too damned arrogant to admit he is ignorant of them.
>
> << No one HAS to buy Microsoft Word. Word Perfect and others are still in
> business, and there are many users of this product who swear that Word Perfect
> IS perfect. They would have nothing else. These users don't go out and switch
> to Microsoft Word in order to exchange documents with Word users. They, unlike
> this naieve or poorly informed critic, learn to use the features provided in
> the product. I can tell from his commentary that he knows very little about the
> capabilities and functions of Word, or probably any other word processor.
>
> << What this guy needs is to take a training course in the use of Microsoft
> Word so he could learn to use it!
>
> > Then why would anyone buy it?
> >Because: 1)if you bought a new computer and you want to send/receive
> >files with all the others using MS, you gotta buy it. 2)if you already
> >have Suite 97 but you keep receiving files from the 2000 people, you
> >have to buy 2000 too.
>
> And the consultant continues:
>
> << Pat:
>
> << Some additional points about Word just for your information. Bring up Word
> and in the menu click FILE, SAVE AS. At the bottom of the "Save as" window,
> click the down arrow assocaited with the "Save as type" box. There you will see
> how Microsoft has provided downward capability for its own products, and the
> ability to save documents in formats for its biggest word processor competitor,
> Word Perfect. Morevover, a document can be saved in "Rich Text Format" (with a
> .rft extension) or plain text format (.txt), such a document is upward,
> downward and "sideways" compatible. Any version of any word processor can read
> it. There are few, if any other programs, except Word Perfect, that provide
> such flexibility. >>
DJR80
>was pleasantly surprised. I thought it was quite good. Very MS'y.
John,
I'm interested. Is it freeware like most Linux? (and is it included with Red
Hat's stuff?) And can it translate Word or Wordperfect?
Dan
in Philly
DJR80
I'm devastated!
> he says:
>Many, like
>me, actually look forward to upgrade releases.
Well, that tells us a lot about him, doesn't it? ;-)
>snipped miscellaneous complaints about people who don't
>appreciate software upgrades.
I do only basic word processing. Sometimes I'll make charts and graphs and put
them into a document. Software from three years ago works just fine for me.
>snipped discussion of "Save As"
As I mentioned in the first post, once people get an upgrade, they almost never
save files in an earlier version. Perhaps they're angry that others haven't
forked out several hundred dollars as well. Perhaps they hate the "formatting
may be lost" message and insist that others see their little animated
doohickeys on a document, to confirm their creative genius.
Also, since I use WordPerfect 7.1, I'm quite experienced with converting
between new Word, old Word, and WordPerfect. And it doesn't work well. Weird
tab settings appear for no reason; "section break" lines abound; unusual
characters (like the british pound) change.
I still maintain there is a negative externality: if 99% of computer users only
need basic stuff, then forcing them to upgrade is a waste of money.
Dan
in Philly
Robert Vienneau
> I still maintain there is a negative externality: if 99% of computer
> users only
> need basic stuff, then forcing them to upgrade is a waste of money.
You also have to relearn how to do lots of stuff with the new version.
I haven't found that Microsoft has had particularly stable user
interfaces.
How nice of Microsoft to provide perpetual retraining classes, at a
price, to allow their customers to interact with their colleagues,
including asking for help with minor capabilities. I, myself,
readily admit to being ignorant of capabilities in Office 2000
that I was quite comfortable with in a previous version. It's not
an encouragement to me to relearn such trivia when I know some of this
knowledge will be outdated with the next release.
I often wonder why people even bother with discussions with
"inarticulate" "net-trash" such as Patrick Sullivan.
"Not long ago, I picked up the New Yorker and found myself deep in
a discussion of QWERTY keyboards, network effects and tippy markets;
these, said the author, were the key to understanding the digital
economy, where a person who controls an important standard can
capture an entire industry. Clearly this article was a cultural
milestone. When information economics comes to the New Yorker,
something has changed in the life of the mind. (The brain reels at
the thought of dinner-table conversation between Dorothy Parker and
Bill Gates. I've always admired her comment on wealth, myself. 'If
you want to know what God thinks of money, just look at the people
he gave it to.')"
-- James Boyle, "Missing the point on Microsoft"
<http://www.salon.com/tech/feature/2000/04/07/greenspan/index.html>
--
r a Whether strength of body or of mind, or wisdom,
v c p or virtue, are found in proportion to the
i s e power or wealth of a man is a question fit
e . . perhaps to be discussed by slaves in the
n m c hearing of their masters, but highly unbecoming
@ a o to reasonable and free men in search of the
d e m truth.
r -- Rousseau
SUSUPPLY
>As I mentioned in the first post, once people get an upgrade, they almost
>never
>save files in an earlier version.
Unless they have a reason to do so. Such as having their writings included in
a book compiled by a person who doesn't have Word 2000. Isn't this just a
matter of comparing elasticities of demand (i.e. pretty standard economic
analysis)?
> Perhaps they're angry that others haven't
>forked out several hundred dollars as well. Perhaps they hate the
>"formatting
>may be lost" message and insist that others see their little animated
>doohickeys on a document, to confirm their creative genius.
I have to confess little insight into the psychology of the academic. But why
is that Microsoft's fault?
>Also, since I use WordPerfect 7.1, I'm quite experienced with converting
>between new Word, old Word, and WordPerfect. And it doesn't work well.
>Weird
>tab settings appear for no reason; "section break" lines abound; unusual
>characters (like the british pound) change.
Again, why is that Microsoft's fault? You're complaining about WordPerfect
above.
>
>I still maintain there is a negative externality: if 99% of computer users
>only
>need basic stuff, then forcing them to upgrade is a waste of money.
>
>Dan
>in Philly
No one is forcing you to do anything. You have concluded that costs are
outweighed by the benefits, so you upgrade.
It seems to me that you are on pretty thin ice with your concept of
externality. Was it a negative externality when the word processor replaced
typewritten documents? When DOS was replaced by Windows?
What improvement in ANY technology would not be a negative externality under
your concept? What action of any kind would not be an externality, for that
matter (if Ann Coulter marries someone other than me, I'll be devastated.
Should I be able to call the anti-trust dept out on her?).
Patrick
SUSUPPLY
>I, myself,
>readily admit to being ignorant of capabilities in Office 2000
>that I was quite comfortable with in a previous version. It's not
>an encouragement to me to relearn such trivia when I know some of this
>knowledge will be outdated with the next release.
Robert, you're a reactionary!
>I often wonder why people even bother with discussions with
>"inarticulate" "net-trash" such as Patrick Sullivan.
Yeah, especially when they'd be re-opening old wounds suffered in getting their
mendacious butts kicked up one side of sci.econ and down the other. Or are you
suffering from repressed memory syndrome?
I guess that must be it, Else why would you quote:
> "Not long ago, I picked up the New Yorker and found myself deep in
> a discussion of QWERTY keyboards, network effects and tippy markets;
That famously peer reviewed, professional journal, The New Yorker!
Too bad the guy who wrote that entirely pedestrian attack in Salon on Greenspan
and free markets, couldn't have first seen Dan's anecdote about how commonplace
moving to superior technology actually is even where there are positive network
effects for standing pat.
He looks about as silly as John Hillas. Let's not forget, history matters.
[snip]
>(The brain reels at
> the thought of dinner-table conversation between Dorothy Parker and
> Bill Gates. I've always admired her comment on wealth, myself. 'If
> you want to know what God thinks of money, just look at the people
> he gave it to.')"
> -- James Boyle, "Missing the point on Microsoft"
Just as I thought. It's a religious thing with you guys. Capitalists Don't
Contribute. God does.
Your buddy,
Patrick
John Hillas
SUSUPPLY <susu...@aol.com>
who still hasn't worked out that he thought that Dan's story about the
pressure
to upgrade due to network externalities was inconsistent with the existence
of network externalities.
wrote in message news:20000409145135...@ng-fv1.aol.com...
a lot of nonsense, which, if he could understand, would embarrass him.
I think it's about time your favourite midwestern economist revised his
opinion.
You understand almost no economic theory, and your insults, rather than an
art form,
are banal, boring, and somewhat pathetic.
d...@temple.edu
> What improvement in ANY technology would not be a negative externality under
> your concept? What action of any kind would not be an externality, for that
> matter (if Ann Coulter marries someone other than me, I'll be devastated.
> Should I be able to call the anti-trust dept out on her?).
No need. Since you both own your bodies, the Coase theorem says
everything is optimal. If you're willing to pay $X to marry her, and
she will pay $Y to avoid you, then if X>Y you two should get together -
and you _will_ because you can pay her some money (between X and Y) to
marry you so both of you become better off.
Dan
in Philly
SUSUPPLY
>SUSUPPLY <susu...@aol.com>
>
>who still hasn't worked out that he thought that Dan's story about the
>pressure
>to upgrade due to network externalities was inconsistent with the existence
>of network externalities.
>
I guess John hasn't figured out that Dan isn't really talking about network
externalities, but network benefits. Perhaps he should acquaint himself with
the relevant literature (I've offered more than once to provide him with the
sites, but for some funny reason he prefers to remain ignorant.).
>wrote in message news:20000409145135...@ng-fv1.aol.com...
>
>a lot of nonsense, which, if he could understand, would embarrass him.
Ah yes, the infamous Southern Hemisphere Appeal To My Own Authority. Otherwise
known as, Could If I Wann'd To; But I have to herd some sheep right now.
>I think it's about time your favourite midwestern economist revised his
>opinion.
>You understand almost no economic theory, and your insults, rather than an
>art form,
>are banal, boring, and somewhat pathetic.
>
Well, he can speak for himself of course, but I can't remember him ever being
so at a loss for words in a discussion that he was reduced to your level.
Which is, "banal, boring, and somewhat pathetic".
At your service,
Patrick
SUSUPPLY
>if Ann Coulter marries someone other than me, I'll be devastated.
>> Should I be able to call the anti-trust dept out on her?).
>
>No need. Since you both own your bodies, the Coase theorem says
>everything is optimal. If you're willing to pay $X to marry her, and
>she will pay $Y to avoid you, then if X>Y you two should get together -
>and you _will_ because you can pay her some money (between X and Y) to
>marry you so both of you become better off.
>
>Dan
>in Philly
Ahem. That was exactly the point.
Remember, I'd earlier in the post said:
>>As I mentioned in the first post, once people get an upgrade, they almost
>>never
>>save files in an earlier version.
>
>Unless they have a reason to do so. Such as having their writings included
>in
>a book compiled by a person who doesn't have Word 2000. Isn't this just a
>matter of comparing elasticities of demand (i.e. pretty standard economic
>analysis)?
Now a little more from my consultant:
<< Hi Pat:
<< I am sure the critic would find it hard to explain why Microsoft has gone to
such great lengths to develop a broad range of text converters, and a strategy
for using them, when they are so intent on forcing everyone into the latest
version. This type of "Help" and these converters have been available, and
have been improved, with each new release of Word.
[snip]
<< you may want to bring up Word, Click Help, select "Microsoft Word Help",
click SEARCH and type in CONVERTERS for a more detailed explanation of this
subject, [but here is a bit of what MS offers:]
<<------------------------------------------------------------
<< Strategies for sharing documents with people who use different versions of
Word
[snip]
<< Share documents with people who use Word 97
If you share documents with members of your workgroup who use Word 2000 or Word
97, you can save your documents in the Word 2000 default (*.doc) format for use
in Word 97. You can quickly create new documents or modify existing documents
specifically for use in Word 97 by turning off features not supported by Word
97.
<< Share documents with people who use Word 95 or Word 6.0
Save your documents in Word 6.0/95 format to open them in Word 95 or Word 6.0.
When you save, Word looks through your document and replaces formatting that is
not supported by Word 95 and Word 6.0 with formatting that is supported by
those versions. Word displays a dialog box showing what formatting will change
in your document. In addition, for the document you saved in Word 6.0/95
format, Word automatically makes features unavailable that are not supported by
Word 95 and Word 6.0. This makes it easy for you to create documents in Word
2000 that will not lose data or look different when viewed in Word 95 or Word
6.0. Save Word 2000 documents in Word 6.0/95 (*.doc) format.
<< View Word 2000 documents in Word 95 or Word 6.0
If you share documents with members of your workgroup who use Word 2000, Word
97, Word 95, or Word 6.0, you can send the Word 2000 converter to the people
who are using Word 95 or Word 6.0. After they install this converter, they can
open and edit documents that are created in Word 2000 or Word 97. >>
I think he makes a pretty good point, Dan. Doesn't the above argue against a
"planned obsolence" strategy?
Patrick
d...@temple.edu
> (snipped discussion of Save As and converters.)
> I think he makes a pretty good point, Dan. Doesn't the above argue against a
> "planned obsolence" strategy?
Maybe. First, I'd love one of those Word 2000 converters. Can anyone
get it? If so, then all my troubles will disappear.
But if the converter is only available to those who already have Word
2000 (or site license for it) then it's a tricky question. Suppose MS
sent out Word 2000 without a "save as" capability. Initially, the
relatively small number of people using Word 2000 would find that they
can't share their files with most other people. This would be such a
drawback that, instead of buying Word 2000, many people might consider
buying, say, WordPerfect which does have conversion and save as
capabilities.
Besides, if they didn't offer the save as option, everyone would raise
hell. I suspect MS would prefer to avoid this - even 800 pound gorillas
have feelings.
Dan
in Philly
Ray
> SUSUPPLY wrote:
> > (snipped discussion of Save As and converters.)
>
> > I think he makes a pretty good point, Dan. Doesn't the above argue
against a
> > "planned obsolence" strategy?
>
> Maybe. First, I'd love one of those Word 2000 converters. Can anyone
> get it? If so, then all my troubles will disappear.
>
Maybe the people whose documents you want to read don't care to go through
the effort of saving them in a format that suits your whim?
Ray
(DJR80) wrote:
> >You aren't making too good an impression on my consultant
>
> I'm devastated!
>
> > he says:
> >Many, like
> >me, actually look forward to upgrade releases.
>
> Well, that tells us a lot about him, doesn't it? ;-)
>
> >snipped miscellaneous complaints about people who don't
> >appreciate software upgrades.
>
> I do only basic word processing. Sometimes I'll make charts and graphs
and put
> them into a document. Software from three years ago works just fine for me.
>
> >snipped discussion of "Save As"
So you, a self-admitted light user, presume to dictate to others (who just
may have a desire to do something more than "only basic") that they not
upgrade? How about if *they* tell you to get with the program and stop
trying to hold everybody else back?
SUSUPPLY
>> I guess John hasn't figured out that Dan isn't really talking about
>network
>> externalities, but network benefits. Perhaps he should acquaint himself
>with
>> the relevant literature (I've offered more than once to provide him with
>the
>> sites, but for some funny reason he prefers to remain ignorant.).
>
>Even for you this is pretty poor. Almost all the
>theory about network externalities are about
>external benefits.
Try reading the actual post before shooting off your mouth, son. Dan said,
"negative externalities" (and more than once).
> And most "relevant literature"
>isn't at "sites."
Here is my earlier offer in October of last year:
<< Given your apparent ignorance of the issues involved in the "path
dependence" debate, I note in passing that I think fora such as the Journal of
Law and Economics, the Journal of Law, Economics, and Organization, the Journal
of Economic Perspectives, and others are more important than sci.econ. And, of
course, should you ever develop a serious interest in the subject I would be
happy to direct you to the articles in those publications from which I have
been largely drawing my arguments. >>
Let's see now what is available at "sites":
http://wwwpub.utdallas.edu/~liebowit/harvj/harvard.html
Gives a paper from the summer 96 issue of Harvard Journal of Law and
Technology, where you will find, from my friends Stan and Steve:
<< The term "network externality" has been used to denote these network
elements. We prefer the term network effect, however, reserving network
externality to apply only to those situations in which market failure causes
inefficient exploitation of a network effect. This distinction is important
because, while network effects may be found in abundance throughout the
economy, network externalities--and the policy implications stemming from the
attendant market failures--may be rare or nonexistent. >>
and, later in the paper:
<< The problem with all of this is that it leads to the conclusion that almost
every good exhibits network externalities, which in turn suggests that the
concept has not been well specified. In our paper on this subject, we
demonstrate that many of the kinds of things that have been called network
externalities actually fall into a category that economists have called
"pecuniary externalities." The important thing about pecuniary externalities is
that while they are an effect that one person has on another, they do not
involve any inefficiency. It is important to distinguish, therefore, between
network externalities that involve some direct interaction among the network
participants, and those that are mediated through the market. >>
Gee, that sounds kinda familiar, doncha think, John?
>Why don't you go back to
>alt.sex.pathetic.fantasy where you belong?
>
>(What has this poor woman done to deserve having
>SUSUPPLY stalking her on newsnet groups?)
Was it my comment about herding sheep that brought that to your mind?
Patrick
John Hillas
SUSUPPLY <susu...@aol.com> wrote in message
news:20000410101436...@ng-fx1.aol.com...
> My favorite Kiwi economist writes:
>
> >SUSUPPLY <susu...@aol.com>
> >
> >who still hasn't worked out that he thought that Dan's story about the
> >pressure
> >to upgrade due to network externalities was inconsistent with the
existence
> >of network externalities.
> >
>
network
> externalities, but network benefits. Perhaps he should acquaint himself
with
> the relevant literature (I've offered more than once to provide him with
the
> sites, but for some funny reason he prefers to remain ignorant.).
Even for you this is pretty poor. Almost all the
theory about network externalities are about
external benefits. And most "relevant literature"
isn't at "sites." Why don't you go back to
alt.sex.pathetic.fantasy where you belong?
(What has this poor woman done to deserve having
SUSUPPLY stalking her on newsnet groups?)
>
SUSUPPLY
<< First, I'd love one of those Word 2000 converters. Can anyone get it? If so,
then all my troubles will disappear. >>
They appear to be available free of charge from the Microsoft Website, Dan. My
consultant says:
<< Tell the Temple fellow that the converters are on his Microsoft CD (if he
has a legit copy.)
<< The following is from the Word Help menu:
<< Obtain file format converters
<< To find out what file format converters you have installed
<< Look in the "Save as" type box (Save As command, File menu) for the list of
converters. If you don't see the converter you need, you can see a list of
converters available with Microsoft Word. You can install these converters by
running the Installer.
<< If you're sharing files with Word 95 or Word 6.0 users
<< People using Word 95 or Word 6.x for Windows, Windows NT, or the Macintosh
must install the Word 2000 import converter before they can open your Word 2000
documents. Obtain the Word 2000 import converter or other converters free of
charge. >>
By the way, he also says Steve Landsburg is wrong. That Word 2000 can do
everything he was claiming exclusively for TeX.
[Dan again:]
<< But if the converter is only available to those who already have Word 2000
(or site license for it) then it's a tricky question. Suppose MS sent out Word
2000 without a "save as" capability. Initially, the relatively small number of
people using Word 2000 would find that they can't share their files with most
other people. This would be such a drawback that, instead of buying Word 2000,
many people might consider buying, say, WordPerfect which does have conversion
and save as capabilities.
<< Besides, if they didn't offer the save as option, everyone would raise hell.
I suspect MS would prefer to avoid this - even 800 pound gorillas have
feelings. >>
Well, of course, you're joking, but in case there are some out there reading
who don't realize that (hi, John), I point out that you have just elucidated
the incentives that Microsoft actually faces.
By coincidence, when your "pet peeve" first appeared, I was exchanging e-mails
with Steve Margolis and Stan Liebowitz about Paul David's latest paper, "QWERTY
Skepticism" (I guess "net trash" is in the eye of the beholder, Robert), . So
I ran your theory of "negative externality in software" by them. Stan offered:
<< One empirical point is that the last
time we checked, Microsoft sold only about 15% of its office suites through
OEMs, so unless we have a 15% tail wagging the 85% dog, the Temple guys guess
is just factually incorrect. >>
Steve had more to say:
<< the problem that the fellow from Temple
mentions (Your e-mail didn't mention a name, so I'm stuck with this
construction.) actually gets to some of the real genius of
Microsoft's approach. As we discuss at some length in the book,
Microsoft has fairly consistently maintained backward compatibility
in its products. This not only addresses the problem that our
Temple guy raises (and really, my apologies to him) but it also
speeds adoption of new software.
<< How's that? My version of Word will let me save a file in any
number of versions. I can save in pre-Windows versions of Word if I
want to, and even in old versions of WordPerfect. Of course, files
saved that way will lose the functionality introduced by the newer
word processors, but that's unavoidable. What all this means is
that people are unlikely to upgrade for reasons of maintaining
compatibility alone. If in fact most people do not appreciate the
new product's capabilities, then our hypothetical early adopter
will find that as a matter of routine, they have to save files in old formats
whenever they are saving files for others to use. The problem that the Temple
guy mentions, of being sent new-format files in spite of his instructions,
would seldom occur if the majority of the world had joined him in his use of
vintage software.
<< As Coase teaches, it is the Temple guy's choice, just as much as
the updaters', that "causes" the externality. In the case in which
most users find the benefits of updating worth the costs, efficiency
may be served by our friend from Philadelphia accommodating the
others, which might best occur by his adopting the new product as
opposed to some marginal accommodation (Coase again). So here
he would be "forced" to change by the actions of others, but in this
case the adoption of the new product passes the cost-benefit test.
<< Notice how backward compatibility works to Microsoft's advantage,
and also the to the advantage of progress in software. Absent this
backward compatibility, the early adopter would suffer the cost of
being unable to exchange files with late adopters. With that, they
would be a bit slower to adopt. In turn, everyone would observe only
small numbers adopting the new product. This would set the stage
for the sort of self-reinforcing process that the lock-in theorists
contemplate. But as Stan and I have argued, consumers and
producers will seek a remedy in the marketplace--in this case the
remedy is backward compatibility. >>
Of course, I'm too modest to point out to Hillas that (according to Steve
Margolis, it seems) he owes me another, "susupply was right".
Patrick
d...@temple.edu
> << First, I'd love one of those Word 2000 converters. Can anyone get it? If so,
> then all my troubles will disappear. >>
> They appear to be available free of charge from the Microsoft Website, Dan.
I just went there
http://www.microsoft.com/office/ork/
and clicked on Toolbox, then found the Microsoft Office Converter Pack
link which moved me down the page to where I could download
Convpack.exe
I'll try it out today and see if it works. If it does, no more negative
externality!
For those late to this thread:
I suggested that some people buy upgrades simply to be able to read
files sent to them by people who have already upgraded; thus it is
possible that the total cost of upgrades exceeds the benefits (the
latter being the more advanced features that some people actually want).
I of course still stand by the logic of my original argument. (I did
read the comments by Margolis and Liebowitz but don't see how they
contradict the theory.)
Dan
in Philly
d...@temple.edu
> > << First, I'd love one of those Word 2000 converters. Can anyone get it?
The answer is yes.
> http://www.microsoft.com/office/ork/
> and clicked on Toolbox, then found the Microsoft Office Converter Pack
> link which moved me down the page to where I could download
> Convpack.exe
> I'll try it out today and see if it works. If it does, no more negative
> externality!
It works! Previously unopenable files now load easily (in fact I just
realized I have Word 6.0 - still no problem). From now on, people can
send me all the Word 2000 files they want.
Hmm.. does this mean Bill Gates is no longer the personification of evil
incarnate?
Dan
in Philly
SUSUPPLY
<< I just went there
http://www.microsoft.com/office/ork/
and clicked on Toolbox, then found the Microsoft Office Converter Pack link
which moved me down the page to where I could download Convpack.exe
<<I'll try it out today and see if it works. If it does, no more negative
externality!
[And later finds that it does work.]
<< For those late to this thread:
I suggested that some people buy upgrades simply to be able to read files sent
to them by people who have already upgraded; thus it is possible that the total
cost of upgrades exceeds the benefits (the latter being the more advanced
features that some people actually want).
<< I of course still stand by the logic of my original argument. (I did read
the comments by Margolis and Liebowitz but don't see how they contradict the
theory.)
I have to say I'm stunned at the above. Especially since you said, " If it
does, no more negative externality!"
Did you notice that Steve Margolis, in the following, put quotes around
"causes" (maybe he should have written, "causes the externality".)?
<< As Coase teaches, it is the Temple guy's choice, just as much as the
updaters', that "causes" the externality. In the case in which most users find
the benefits of updating worth the costs, efficiency may be served by our
friend from Philadelphia accommodating the others, which might best occur by
his adopting the new product as opposed to some marginal accommodation (Coase
again). So here he would be "forced" to change by the actions of others, but in
this case the adoption of the new product passes the cost-benefit test. >>
How about that last sentence just above?
Did you also see what I quoted for Hillas from:
http://wwwpub.utdallas.edu/~liebowit/harvj/harvard.html
<< The term "network externality" has been used to denote these network
elements. We prefer the term network effect, however, reserving network
externality to apply only to those situations in which market failure causes
inefficient exploitation of a network effect. This distinction is important
because, while network effects may be found in abundance throughout the
economy, network externalities--and the policy implications stemming from the
attendant market failures--may be rare or nonexistent. >>
and, later in the paper:
<< The problem with all of this is that it leads to the conclusion that almost
every good exhibits network externalities, which in turn suggests that the
concept has not been well specified. In our paper on this subject, we
demonstrate that many of the kinds of things that have been called network
externalities actually fall into a category that economists have called
"pecuniary externalities." The important thing about pecuniary externalities is
that while they are an effect that one person has on another, they do not
involve any inefficiency. It is important to distinguish, therefore, between
network externalities that involve some direct interaction among the network
participants, and those that are mediated through the market. >>
How about from the Journal of Economic Perspectives:
http://wwwpub.utdallas.edu/~liebowit/jep.html
<< C. Internalizing through transactions
<< Even if ownership over some networks may not be possible, many network
effects might nonetheless be internalized by the direct interaction of
participants. A group of programmers who are working on a software project can
capture all of the potential benefits of a network by adopting a common
language for the group. Although other programmers outside the group may use
the same language, the network effects will be limited to those who ultimately
interact. The same analysis applies to the exchange of video tapes or
computer-data-storage media. In such instances, which we suspect are very
common, it is not important how large the compatible network is, only that all
individuals who would interact are compatible.
<< Interactions of this sort involve transactions. Although we may not be able
to transact with every motorist who fouls the air that we breathe, we can
advise our parents to buy a VHS video cassette recorder if they want to see
home movies of their grandchildren; and we can negotiate with a co-author
regarding which word-processing software to use. Since the exchange of such
materials is itself a transaction, it seems unreasonable to assume that in such
cases transactions costs are prohibitive. But if transactions are relatively
easy, then the existence of an externality is unlikely. >>
Patrick
d...@temple.edu
> << As Coase teaches, it is the Temple guy's choice, just as much as
the
> updaters', that "causes" the externality.
Not sure what that means. But I agree with the following:
> In the case in which most users find
> the benefits of updating worth the costs, efficiency may be served by our
> friend from Philadelphia accommodating the others, which might best occur by
> his adopting the new product as opposed to some marginal accommodation (Coase
> again).
My quibble was whether "most" users benefit - I considered it an open
question whether the total benefits outweighed the total losses.
Along those lines, it be interesting to have a market for _preventing_
the release of upgrades, thus see how much people would pay Microsoft to
stop upgrades as opposed to those who would pay to get an upgrade.
[Anyway, all the above rendered moot by having free converters
available.]
Dan
in Philly
SUSUPPLY
>Patrick's collegues wrote:
Nah, I think they'd make lousy dumptruck drivers. They're just a couple of
pointy head intellectuals from NC State and UT Dallas.
> > << As Coase teaches, it is the Temple guy's choice, just as much as
>the
>> updaters', that "causes" the externality.
>
>Not sure what that means.
It means there is no externality. As they say in their (I think it was) JEP
paper, " why should 'externality' mean something different in this case than in
the rest of economics?" [not an exact quote, but it's Saturday]
> But I agree with the following:
>
>> In the case in which most users find
>> the benefits of updating worth the costs, efficiency may be served by our
>> friend from Philadelphia accommodating the others, which might best occur
>by
>> his adopting the new product as opposed to some marginal accommodation
>(Coase
>> again).
>
>My quibble was whether "most" users benefit - I considered it an open
>question whether the total benefits outweighed the total losses.
Remember your application of Coase to the lovely Ann and myself?
>Along those lines, it be interesting to have a market for _preventing_
>the release of upgrades, thus see how much people would pay Microsoft to
>stop upgrades as opposed to those who would pay to get an upgrade.
>[Anyway, all the above rendered moot by having free converters
>available.]
No one is stopping such a market from existing. It seems the non-existence of
such is evidence against your theory being correct. At any rate, it still
warms the cockles of my heart to see David and Arthur stood on their head.
Imagine, thinking we have to now PAY to be path dependent!
Patrick
d...@temple.edu
> >the release of upgrades, thus see how much people would pay Microsoft to
> >stop upgrades as opposed to those who would pay to get an upgrade.
> >[Anyway, all the above rendered moot by having free converters
> >available.]
> No one is stopping such a market from existing.
The free rider problem prevents it. If a bunch of people are going to
pay Microsoft to not make an upgrade, why should I pay? But everyone
else thinks the same thing, so no one pays, so it doesn't happen even if
it would be a net benefit.
Dan
in Philly
SUSUPPLY
Doesn't seem like such a problem to me. For one thing Microsoft could create
such a market itself--and probably would if your theory were correct. They'd
just charge a higher price for the never-to-be-upgraded Word.
Patrick
d...@temple.edu
> >> >Along those lines, it be interesting to have a market for _preventing_
> >> >the release of upgrades, thus see how much people would pay Microsoft to
> >> >stop upgrades as opposed to those who would pay to get an upgrade.
> >SUSUPPLY wrote:
> >> No one is stopping such a market from existing.
> Dan in Philly writes:
> >The free rider problem prevents it.
SUSUPPLY wrote:
> Doesn't seem like such a problem to me. For one thing Microsoft could create
> such a market itself--and probably would if your theory were correct. They'd
> just charge a higher price for the never-to-be-upgraded Word.
I still see a free rider problem. If lots of people are going to pay MS
to not make an upgrade, I can sit by and let them pay. Since they all
would do the same, no one would pay. This problem occurs because the
option "MS doesn't make an upgrade" is a collective good.
To get a market there would have to be a way for MS to sell the benefit
of no upgrade to individuals. Actually this could be done by selling
the Word converter to people like me who are worse off because of
upgrades. What's interesting is that MS gives the converter away for
free! (Does that mean Bill G. isn't maximizing profits?!)
Dan
in Philly
SUSUPPLY
>> Doesn't seem like such a problem to me. For one thing Microsoft could
>create
>> such a market itself--and probably would if your theory were correct.
>They'd
>> just charge a higher price for the never-to-be-upgraded Word.
Dan in Philly insists:
>I still see a free rider problem. If lots of people are going to pay MS
>to not make an upgrade, I can sit by and let them pay. Since they all
>would do the same, no one would pay. This problem occurs because the
>option "MS doesn't make an upgrade" is a collective good.
First of all, free rider problems do not have to prevent markets from
functioning. Those imbecilic pledge weeks on Public Broadcasting have been
going on for years, and they seem to raise money. So, if your second sentence
above is literally true it wouldn't result in what you claim in your third
sentence.
People might be resentful of the free riders, but they could, if they feel
strongly enough, pay MS to not upgrade. It would be an organizational problem,
but with resources like the internet or maybe Talk Radio it could be done.
Pledges could be taken from interested parties, or monies collected and held in
escrow to see just what you originally asked:
>> >> >Along those lines, it be interesting to have a market for _preventing_
>> >> >the release of upgrades, thus see how much people would pay Microsoft
>to
>> >> >stop upgrades as opposed to those who would pay to get an upgrade.
Second, Microsoft could easily sell the benefit, but not as you put it below.
MS could have announced that Word 6.0 (or whatever) would be the last upgrade
for 5 years. The licensing agreement could offer triple your money back if MS
upgrades it before then. If your theory is correct, it should sell like
hotcakes.
>To get a market there would have to be a way for MS to sell the benefit
>of no upgrade to individuals. Actually this could be done by selling
>the Word converter to people like me who are worse off because of
>upgrades.
>What's interesting is that MS gives the converter away for
>free! (Does that mean Bill G. isn't maximizing profits?!)
No, it means he IS maximizing. There are lots more people who want the
upgrades than would pay to keep the status quo. That was the point Steve
Margolis was making when he wrote:
<< Notice how backward compatibility works to Microsoft's advantage,
and also the to the advantage of progress in software. Absent this
backward compatibility, the early adopter would suffer the cost of
being unable to exchange files with late adopters. With that, they
would be a bit slower to adopt. In turn, everyone would observe only
small numbers adopting the new product. This would set the stage
for the sort of self-reinforcing process that the lock-in theorists
contemplate. But as Stan and I have argued, consumers and
producers will seek a remedy in the marketplace--in this case the
remedy is backward compatibility. >>
Patrick
d...@temple.edu
> >I still see a free rider problem. If lots of people are going to pay MS
> >to not make an upgrade, I can sit by and let them pay. Since they all
> >would do the same, no one would pay. This problem occurs because the
> >option "MS doesn't make an upgrade" is a collective good.
> First of all, free rider problems do not have to prevent markets from
True, it could work that way. Or it could work like the usual Micro 101
pollution example, where not enough people pay.
> Second, Microsoft could easily sell the benefit, but not as you put it below.
> MS could have announced that Word 6.0 (or whatever) would be the last upgrade
> for 5 years. The licensing agreement could offer triple your money back if MS
> upgrades it before then. If your theory is correct, it should sell like
> hotcakes.
This is problematic - I'm going to have to think about it. Remember,
even people who don't like the upgrade often buy it just to be able to
communicate with others (and still leaving themselves with a welfare
loss), so maybe MS wouldn't get much of a boost from selling the
no-upgrade version.
> >...(Does that mean Bill G. isn't maximizing profits?!)
> No, it means he IS maximizing. There are lots more people who want the
> upgrades than would pay to keep the status quo. That was the point Steve
> Margolis was making when he wrote:
> << snipped discussion of backward compatiblity>
I still don't see how their argument about backward compatibility
relates to the potential negative externalities of people buying
upgrades they don't want.
Dan
in Philly
David Lloyd-Jones
<d...@temple.edu> wrote in message news:390095...@temple.edu...
> > Dan in Philly:
> > >I still see a free rider problem. If lots of people are going to pay
MS
> > >to not make an upgrade, I can sit by and let them pay. Since they all
> > >would do the same, no one would pay. This problem occurs because the
> > >option "MS doesn't make an upgrade" is a collective good.
>
> SUSUPPLY/Patrick:
> > First of all, free rider problems do not have to prevent markets from
> > functioning. <snipped example of PBS pledges>
This gives an unusually ubiquitous and loathsome example of free riding.
Usually free-riding only encompasses people who participate, but when you
are paying somebody not to upgrade then both purchasers and non-purchasers
of the product go un-upgraded and become free riders.
Oh, the monopoly of it!
-dlj.
SUSUPPLY
>SUSUPPLY/Patrick:
>> First of all, free rider problems do not have to prevent markets from
>> functioning. <snipped example of PBS pledges>
>
>True, it could work that way. Or it could work like the usual Micro 101
>pollution example, where not enough people pay.
I don't understand that at all. We're not talking about pollution. That's a
very different sort of problem.
>> Second, Microsoft could easily sell the benefit, but not as you put it
>below.
>> MS could have announced that Word 6.0 (or whatever) would be the last
>upgrade
>> for 5 years. The licensing agreement could offer triple your money back if
>MS
>> upgrades it before then. If your theory is correct, it should sell like
>> hotcakes.
>
>This is problematic - I'm going to have to think about it. Remember,
>even people who don't like the upgrade often buy it just to be able to
>communicate with others (and still leaving themselves with a welfare
>loss), so maybe MS wouldn't get much of a boost from selling the
>no-upgrade version.
Exactly. There's no money in stifling progress.
>> >...(Does that mean Bill G. isn't maximizing profits?!)
>
>> No, it means he IS maximizing. There are lots more people who want the
>> upgrades than would pay to keep the status quo. That was the point Steve
>> Margolis was making when he wrote:
>> << snipped discussion of backward compatiblity>
>
>I still don't see how their argument about backward compatibility
>relates to the potential negative externalities of people buying
>upgrades they don't want.
I still don't see how you fail to understand there is no negative externality.
The benefits of the network you do belong to may get smaller as more and more
people upgrade (ignoring those wonderful converters, that is). But step back,
remember there was a time when you bought your first computer (or telephone, or
fax). You got the network benefit from doing so, those who didn't buy as soon
as you didn't. But that is not a negative network externality unless you so
torture the definition of externality it becomes meaningless.
Patrick