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Generic technology R&D decision with technology spillover, cost difference, and bargaining power under oligopoly competition

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  • Junlong Chen
  • Xiaomin Sun
  • Jiayan Shi
  • Yajie Wang

Abstract

This study constructs an oligopoly model considering generic technology R&D, analyzes the market equilibrium results under R&D cooperation and non-cooperation, explores the impacts of technology spillover, cost difference, and firm’s bargaining power, and compares the boundary conditions between R&D cooperation and non-cooperation. The results show that when the degree of technology spillover is small, the R&D firm conducts drastic R&D, resulting in a complete monopoly. The market structure and equilibrium results are influenced by the degree of technology spillover, cost difference, bargaining power, and the number of following firms. Cooperation in R&D can be considered as a Nash equilibrium in certain cases. Compared with R&D non-cooperation, R&D cooperation can lead to higher profits for firms. When the degree of technology spillover is large and the number of following firms is small, R&D cooperation yields greater consumer surplus and social welfare.

Suggested Citation

  • Junlong Chen & Xiaomin Sun & Jiayan Shi & Yajie Wang, 2025. "Generic technology R&D decision with technology spillover, cost difference, and bargaining power under oligopoly competition," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 34(3), pages 418-441, April.
    • Handle: RePEc:taf:ecinnt:v:34:y:2025:i:3:p:418-441
    DOI: 10.1080/10438599.2024.2348036
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