Research On Profit-sharing Arrangement In Vertical Cooperative R&D In Supply Chain

As the intensifying of market competition, the shortening of product life cycles,more and more enterprises establish R&D alliances with the upstream or downstreamenterprises in supply chain for shortenting the cycle of R&D and using the advantageousR&D resources, as a result, their core compition will be enhanced. But the moral hazardand unfair profit sharing arrangement made many cooperations fail. It is necessary tomake a research on the moral hazard and profit sharing arrangement in supply chainvertical cooperative R&D to find the optimum profit sharing arrangement for preventingmembers’ moral hazard in cooperative R&D and incenting they make more R&Dcommitments, as a result, the cooperative R&D ends in success.In view of the fail of cooperative R&D caused by moral hazard and unfair profitsharing arrangement, as well as the inadequacy of existing studies, that is the profitsharing arrangements designed by the existing studies are hardly to implied due to thedifficultty to set their parameters, this paper presents vertical cooperative R&D gamemodels with stalemate return, technological uncertainty, or input spillover to study theenterprises’ R&D commitment polices under equal or proportional profit sharingarrangement, which are the most popular profit sharing arrangement in reality, andanalyzes the effects of profit sharing arrangement, stalemate return, technologicaluncertainty, input spillover or market return on their R&D commitment polices. Theoptimal investment policy and profit sharing arrangement for full cooperation are foundthrough the analyises of the impact of network externalities, spillover effects andcooperative mode on investment policies, enterprises’ profit and social welfare.The main contents of this paper are as follows.①Study on the profit-sharing arrangement in supply chain vertical coopearaiveR&D with return of even status.This part is composed of Chapter3. Under the assumption that two supply chainscompete in development of a same product and both can get a return when competition isin the even status, it is studied that the members’ investment policies under differentprofit-sharing arrangement and look for the optimal arrangement to prevent moral hazardand make the cooperative R&D successful through analyzing the effect of market return,return of even status and profit-sharing arrangement on the member’s investment policy.②Study on the profit-sharing arrangement in supply chain vertical coopearaive R&D with technological uncertainty.This part is composed of Chapter4. Under the assumption that there is technologicaluncertain during R&D, namely, there is the possibility that the R&D fails due to otherfactors but investing nothing in R&D, it is studied that the members’ investment policiesunder different profit-sharing arrangement and look for the optimal arrangement toprevent moral hazard and make the cooperative R&D successful through analyzing theeffect of market return, technological uncertaity and profit-sharing arrangement on themember’s investment policy.③Study on the profit-sharing arrangement in supply chain vertical coopearaiveR&D with input spillover.This part is composed of Chapter5. Under the assumption that there is inputspillover during R&D caused by the exchange or leak of R&D information or the flow ofresearcher, it is studied that the members’ investment policies under differentprofit-sharing arrangement and look for the optimal arrangement to prevent moral hazardand make the cooperative R&D successful through analyzing the effect of market return,input spillover effect and profit-sharing arrangement on the member’s investment policy.In the existing research of preventing moral hazard by the design of profit-sharingarrangement, some parameters of those arrangements are hard to ascertain, as a result, it ishard to be implied. In this paper, the optimal profit-shairng arrangement is found frompopular profit-sharing arrangement, namely, equal and proportional arrangement, in orderto prevent moral hazard. The theoretical and methodological innovations of this paper areas follows.①Under the assumption that there is a return of even status in R&D competition, agame model of supply chain cooperative R&D is developed to analyzes the member’sinvestment policies under different profit-sharing arrangement and the effect of marketreturn, return of even status and profit-sharing arrangement on the member’s investmentpolicy, in order to find the optimal and feasible arrangement under the condition that thereis return of even status to prevent moral hazard and make the cooperative R&Dsuccessful.②Under the assumption that there is technological uncertainty during R&D, agame model of supply chain cooperative R&D is developed to analyzes the member’sinvestment policies under different profit-sharing arrangement and the effect of marketreturn, technological uncertainty and profit-sharing arrangement on the member’sinvestment policy, in order to find the optimal and feasible arrangement under the condition of technological uncertainty to prevent moral hazard and make the cooperativeR&D successful.③Under the assumption that there is input spillover during R&D, a game model ofsupply chain cooperative R&D is developed to analyzes the member’s investment policiesunder different profit-sharing arrangement and the effect of market return, input spillovereffect and profit-sharing arrangement on the member’s investment policy, in order to findthe optimal and feasible arrangement under the condition of input spillover to preventmoral hazard and make the cooperative R&D successful.