American Institute of Mathematical Sciences

doi: 10.3934/jimo.2022085
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Cooperative and noncooperative R&D in duopoly manufacturers with a common supplier

 1 School of Business, Nanjing Audit University, Nanjing, 211815, China 2 School of Data Science, The Chinese University of Hong Kong, Shenzhen, School of Management and Economics, University of Electronic Science and Technology, Shenzhen, 518172, China; Chengdu, 610054, China 3 School of Business, Nanjing University, Nanjing, 210093, China 4 Shenzhen Research Institute of Big Data, Shenzhen, 518172, China

*Corresponding author: Yangyang Peng

Received  July 2021 Revised  March 2022 Early access June 2022

We consider the R&D strategy of firms under competitive environments from the supply chain perspective. Specifically, we investigate a supply chain consisting of one upstream component supplier and two downstream manufacturers, who however are the Stackelberg leader(s). At the early stage (R&D stage), the two manufacturers decide on whether to cooperate or not in the R&D activities and how much to invest in R&D accordingly. At the late stage (market stage), the component supplier decides on the uniform wholesale price and the manufacturers decide on the production quantities. Our main findings include: (ⅰ) Cooperative R&D strategy will be adopted when the technology spillover effect is either too large or too small and in contrast non-cooperative strategy will be accepted when the spillover effect is moderate. However, the underlying driving forces for coordination are different when the spillover effect is small or large, i.e., cost reduction effect and sales increasing effect. (ⅱ) Cooperative R&D could increase the social welfare when both the technology spillover effect and the (initial) unit production cost are high. (ⅲ) As the equilibrium under the cooperative R&D strategy is unstable, we give a coordination mechanism, to guarantee the stability of cooperative R&D investments.

Citation: Fuli Zhang, Yangyang Peng, Xiaolin Xu, Xing Yin, Lianmin Zhang. Cooperative and noncooperative R&D in duopoly manufacturers with a common supplier. Journal of Industrial and Management Optimization, doi: 10.3934/jimo.2022085
References:

show all references

References:
The Four-Stage Game between Upstream Supplier and Downstream Manufacturers
Optimal R&D Strategies for Downstream Manufacturers
The R&D Decision Matrix
The Effect of Supplier's Willingness to Cooperate
The Equilibrium Outcomes in Noncooperative R&D Strategy
 Scenario $c_n(\beta)  Scenario$ c_n(\beta)
The Equilibrium Outcomes in Cooperative R&D Strategy
 Scenario $c_o(\beta)  Scenario$ c_o(\beta)
The Equilibrium Outcomes in Cooperative R&D Strategy
 Scenario $c_o(\beta)  Scenario$ c_o(\beta)
The Equilibrium Outcomes in Noncooperative R&D Strategy
 Scenario $c_n(\beta)  Scenario$ c_n(\beta)
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