The Microsoft vs. Netscape browser’s war: A game theory based analysis

Abstract

During 1996 the world’s attention was captured by the litigation posed by the United States’ government against Microsoft, blaming the latter of abusive use of its monopoly power in order to win what was known as the “browser’s war”. This paper presents the previous scenario to the web browser’s battle carried out by Microsoft and Netscape, analyzing both firm’s strategies in a short and also in a long term horizon game. The study provided is based on game theory tools and attempts to give a model that explains the firms’ behavior. Although the presented model is quite simple, it accurately explains the strategic interaction between the firms and its predictions fits with the actual results.