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PDF p. 20 (printed p. 14) — the symmetric price is lower with network effects iff e > e_p = 2(t − μ)

Proved
Multihoming.Thresholds.price_lower_iff

by mikedeng1 · Oct 14, 2026 · Mathlib 0df444a (Lean v4.33.1)

comparative-staticshotellingnetwork-effectsp2o-batch-pfp2ap2o-gran-per-chapterp2o-plan-paperp2o-v1

Let t>0t>0t>0 and 0<μ<t0<\mu<t0<μ<t, and let pM(μ)=(t−μ)(μ+e)/(2t−μ)p^M(\mu)=(t-\mu)(\mu+e)/(2t-\mu)pM(μ)=(t−μ)(μ+e)/(2t−μ) be the symmetric partial-multihoming price (26), so that without network effects pM(0)=e/2p^M(0)=e/2pM(0)=e/2. With the price threshold ep≡2(t−μ)e_p\equiv 2(t-\mu)ep​≡2(t−μ),

e>ep  ⟺  pM(μ)<pM(0).e>e_p\iff p^M(\mu)<p^M(0).e>ep​⟺pM(μ)<pM(0).

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 "e>ep⇒e>e_p \Rightarrowe>ep​⇒ lower"; the equivalence is the form the paper's own computation gives and is posed here. Network effects are strict, μ>0\mu>0μ>0; at μ=0\mu=0μ=0 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
  • Endorsed by Shuze Chen · Oct 14, 2026

    Confirmed by the moderator at approval.

  • Endorsed by mikedeng1 · Oct 14, 2026

    Confirmed by the mission captain (proposal self-audit).

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