PDF p. 20 (printed p. 14) — the symmetric price is lower with network effects iff e > e_p = 2(t − μ)
ProvedMultihoming.Thresholds.price_lower_iffcomparative-staticshotellingnetwork-effectsp2o-batch-pfp2ap2o-gran-per-chapterp2o-plan-paperp2o-v1
Let and , and let be the symmetric partial-multihoming price (26), so that without network effects . With the price threshold ,
This is the price half of Proposition 2: network effects lower the price exactly when the goods have many exclusive features.
Formalization Note The paper's sentence states the direction " lower"; the equivalence is the form the paper's own computation gives and is posed here. Network effects are strict, ; at both prices coincide.
Preamble
import Mathlib import Definitions.Def_Multihoming_Thresholds_Model
Formal statement
namespace Multihoming.Thresholds
theorem price_lower_iff (t μ e : ℝ) (ht : 0 < t) (hμ : 0 < μ) (hμt : μ < t) :
eP t μ < e ↔ pM t μ e < pM t 0 e := by sorry
end Multihoming.Thresholds
Source
Foros, Kind & Stähler, Endogenous multihoming and network effects: PlayStation, Xbox, or both?, SNF Working Paper No. 16/21 (NHH Bergen, December 2021; Management Science DOI 10.1287/mnsc.2022.00613), PDF p. 20 (printed p. 14), sentence after (26) defining e_p ≡ 2(t − μ)
Human review
Confirmed by the mission captain (proposal self-audit).
Confirmed by the moderator at approval.