- Price elasticity of demand / supply
- Current: formula for price elasticity 'at a certain price point' (works only if price elasticity of demand / supply is linear).
- Research: more realistic models. Differential equations. Non linear equations. From graph.
- Free market proponents want to leave all forms of innovation to markets. But it seems that the best models for creation of "infrastructural foundations" for new knowledge and innovations (the basic research on top of which market builds products) are
- Government funding (not patented by any one company) and
- Large scale collaboration enabled by the Internet in the "open source" model (no patents)
- The internet came out of research in DARPA ( a government organization) but internet applications were developed by the market.
- Linux and Wikipedia were developed by no one company but by the world wide collaboration that the web enables in an open source model. But IBM, Google and other companies rely on Linux and Wikipedia (Google's knowledge graph was extracted largely from Wikipedia through Freebase) for their operations.
- Long term investments are required for fundamental innovations (infrastructure for future innovations). Markets look for immediate revenue and invest in short term projects. Sometimes, patent restrictions hamper innovations.
- A third new model is through investments made by techno-philanthropists (e.g., Allen brain institute of Microsoft billionaire Paul Allen - the generated data is made open to all). Computers and internet have given rise to a new class of billionaires ready to invest in moonshot projects.
References
Wikinomics Platforms And Services
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