Horizontal R&D Cooperation and Quantity Competition in Duopoly Market with Differential Production

Forming technology alliance to cooperate in RD is an important means to improve firm's competence.This paper constructs a two-stage game model with differential product of two firms in duopoly market through introducing Court model with differential product to extend the classical AJ model.By dint of analytic results and numerical value,the paper analyzes effects of product difference degree and spillovers level on equilibrium behaviors in Duopoly under four regimes,such as complete noncooperation,half cooperation,complete cooperation and social warfare maximization,and takes a comparative analysis for equilibria under four regimes and gap between them.This paper comprehensively discloses the RD cooperative mechanism of duopoly with differential production.