Stability Analysis of R&amp;D Cooperation in a Supply Chain

Xu, Luyun; Liang, Dong; Duan, Zhenjie; Xu, Xiao

doi:10.1155/2015/409286

Cited by 9 publications

(5 citation statements)

References 25 publications

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“…Dickson et al [18] empirically analyzed the effects of opportunism on the R&D alliances of small-to medium-sized enterprises (SMEs) with samples from eight countries. Xu et al [19] studied opportunistic behaviors in vertical R&D using game theory, and proved the inherent instability of vertical R&D, since downstream firms are more likely to break the agreement. Conti and Marini [20] found that information asymmetry may exacerbate underinvestment without R&D agreements.…”

Section: Literature Reviewmentioning

confidence: 99%

Risk Dominance Analysis of R&D Investment Cooperation in Dynamic Option Game

Liu

Qian

et al. 2022

Sustainability

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Research and development (R&D) investment is very important for firms to gain competitive advantages and sustainable development. Due to the uncertainty of the market and competitors, R&D investment is usually costly and high risk. In such circumstances, firms not only have to figure out the optimal investment timing, but also consider whether to cooperate with competitors to share the risks and costs. In this paper, a two-stage dynamic exchange option game model is proposed for two symmetric competing firms to analyze their R&D investment decision and cooperation. The results show that under uncertainty, the R&D investment timing and cooperation strategy of the two firms depend on the market fluctuation, R&D cost, opportunity benefit of free riding, and the externality of cooperation. If the opportunity benefit of free riding is less than or equal to half of the cooperative research cost, the two firms will invest as early as possible and cooperate. The technology spillover and profits of new products will positively affect the willingness of the competing firms to invest and cooperate in R&D. Moreover, we also calculate the market value thresholds of the investment strategies for the two firms. When the market value is small, the two firms wait for the R&D investment; when the value increases, the firm with a high successful R&D probability will lead the investment, and the other firm follows the investment; when the value is large enough, the two firms will invest at the beginning of the period.

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Section: Literature Reviewmentioning

confidence: 99%

Risk Dominance Analysis of R&D Investment Cooperation in Dynamic Option Game

Liu

Qian

et al. 2022

Sustainability

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“…The advantage of one of the above models of vertical R&D over the others turned out to depend on the value of knowledge spillovers in the industry. Xu, Liang, Duan, and Xiao (2015) use the analytical framework developed by Kamien et al (1992) to formally show that vertical R&D cooperation is unstable, as the downstream firm is more likely to break the cooperation agreement. Therefore, when establishing R&D cooperation, firms must carefully consider the reputation of potential partners and the extent of trust between the firms operating in the supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Vertical R&D Cooperation on Market Performance of Firms

Karbowski

Prokop

2019

EBER

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The aim of this article is to investigate the impact of vertical R&D cooperation on market performance of firms. Specifically, we explore the impact of vertical R&D cooperation on firms' process innovation, outputs, market prices, and economic profits. Research Design & Methods:We apply microeconomic methods of analysis, i.e., mathematical modelling and optimisation procedures. We perform a comparative static analysis of two selected patterns of R&D in a supply chain, i.e. independent behaviour of firms and behaviour of firms in a vertically integrated industry. Findings: Vertical integration leads to significantly higher individual R&D investments. For all values of knowledge spillovers, consumer surplus and social welfare are higher under vertical integration compared with the independent behaviour of firms. Under independent behaviour, profit of the supplier is significantly larger compared with the vertical integration. The profit of the final-good manufacturer is significantly lower under independent behaviour compared with the vertically integrated industry. Implications & Recommendations: In regard to business and public policy implications, the large knowledge spillovers promote consumer surplus and social welfare in the vertically integrated industry, while small knowledge spillovers promote process innovations in the vertically integrated industry. Contribution & Value Added: Firms' process innovation benefits from the vertical integration of the industry. Moreover, the greatest benefits from vertical integration for consumers and social welfare come from the largest knowledge spillovers in the industry. Article type:research article

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“…+ < 1 represents the decreasing returns to scale, or decreasing marginal utility of R&D investment. In other words, with the increase of R&D investment or the technical level, the increment of technical level from the same R&D investment decreases, or we should make more R&D investment to obtain the same increment of technical level [22].…”

Section: Problem Description and Thementioning

confidence: 99%

Collaborative R&D and Pricing Policy of Supply Chain under the Selection Behavior of Heterogeneous Customer

Huang

Saaty

2019

Mathematical Problems in Engineering

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Considering that a manufacturer and its core part supplier make collaborative R&D on serial products of 3 grades, high-, mid-, and low-grade, and their core parts according to costumers' preference for the performance, or intrinsic value, of products, we propose a collaborative R&D model based on costumers' selection behavior to study the collaborative R&D policy and pricing policy of the supply chain. Then we establish a bargaining game model to study how they allocate the profit they earned. We obtain the optimal policies through theoretic and experimental analysis, and we use Apple iPhone case to illustrate the models and conclusions of this paper. It is found that if the aim of the supply chain is only to maximize its total profit, it should only develop the high-grade product and make its price half of its intrinsic value; if the aim of the supply chain is to maximizing profit while increasing the sales and market shares of the serial products, it should at least develop the high-grade and low-grade product; the ratio of price between the higher grade and the lower grade should be greater than the corresponding ratio of the intrinsic value, while the difference of price between higher grade and the lower grade should be less than the corresponding difference of the intrinsic value.

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Stability Analysis of R&D Cooperation in a Supply Chain

Cited by 9 publications

References 25 publications

Risk Dominance Analysis of R&D Investment Cooperation in Dynamic Option Game

Risk Dominance Analysis of R&D Investment Cooperation in Dynamic Option Game

The Impact of Vertical R&D Cooperation on Market Performance of Firms

Collaborative R&D and Pricing Policy of Supply Chain under the Selection Behavior of Heterogeneous Customer

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