Models of Competition

Defining a market:

• Define a market by thinking of the relevant constraints and regions for each company.
• Also consider highly differentiated products: i.e Ferrari and Hyundai

Cross price Elasticity:

• The cross-price of elasticity of demand (CPE)
• Two products: x and y

$${ϵ}_{Q(y),P(x)}^D=\frac{\text{precentage change in quantity demanded of y}}{\text{ Precentage change in price of x}}$$ $${ϵ}_{Q(y),P(x)}^D\{\begin{array}{l}>0\text{: subsitutes}\\ =0\text{: unrelated}\\ <0\text{: complements}\end{array}$$

Market Demand

What percentage of patents have meaningful value?

I guessed 1 percent Around 5%