We have recently been on the topic of information cascades and how they affect things like consumer choices. One of the best examples of this is the OS war – that is, the competition between things like Windows and Linux (I’ll leave out Mac in most of this article for simplicities’ sake). Most consumer PC’s nowadays have Windows on them, but why – and perhaps more importantly, Windows XP or Windows Vista?

The answer to the first question can readily be explained with information cascades. Linux and Windows are fairly incompatible in that they don’t necessarily run the same programs. However, even this doesn’t seem to be the problem, with programs like Open Office and Firefox bridging the compatibility gap. A better explanation for this phenomenon is simply that everyone has Windows. The interface is well known, and the average user wants what everyone else has for fear of not knowing how to operate anything else. Wal-Mart recently decided to stop selling a Linux based PC. Although it sold fairly respectably, Wal-Mart commented that it wasn’t what its customers wanted. The failure of “experiments” like this to migrate the average user to Linux is testimony to the information cascade – people don’t know Linux, but their friend told them of Windows, so they buy the Windows PC.

The second question is discussed in this article. This article exemplifies the negative attitude towards Windows latest OS, Windows Vista. Despite Microsoft’s push to accept the new OS as described in the article, Windows XP continues to sell and be used by companies like Dell. Why? Originally it was because Vista was ridden with bugs, but by now, as Mike Ricciuti put it, the “random glitches appear to have been fixed”. Why are sales still slow then? Despite the OS working, consumers originally heard Vista was bug-ridden, told their friends, and the effect cascaded from there.