Study On Cooperative R&D Entity Between Companies And The Incentive Technology Policy Of Government

For a long time cooperative innovation has become an important problem that firmer and economists focus on. There are many benefits of cooperation, such as realizing scale of economy, avoiding duplication of research efforts, internalizing spillovers of technology, accessing to partners'know-how, overcoming cost of R&D barriers. The idea of cooperation is widely accept by people. But firms face many risks during cooperative innovation. Because of asymmetric information between member firms, uncertainty and complexity of innovation, moral hazard and adverse selection problems, such as free ride of member firms, are very common during cooperation. These risks are main reasons why cooperative innovation end up a failure.Government's incentive policy can promote cooperation among companies, because gaining incentive subsidies is one of the most important drive for companies. However, for the incentives, government will face two problems. Firstly, the policy might bring social distortion cost. Secondly, companies might chose to free ride or adverse selection. That's to say, company is apt to claim that the cooperative object is higher innovation value for the purpose of seeking profits to obtain more support from government. In a context of asymmetric information,we will focus on try to find the most optimal incentive policy to alleviate company's free-riding behavior.In this paper ,we will analyze the technology-complementing R&D entity.At first, we set up the basic decision model of members of cooperative R&D entity. Then we get the equilibrium solution of two incentive technology policy ( R&D subsidy and partial-monitoring) by considering the variables of social distortion cost and social benefit about the model. By comparing the equilibrium social benefit of two policies, we found that partial-monitoring will get better results. As a result of it , we draw the conclusion of our study: partial-monitoring is the most optimal incentive policy.The conclusion is of great value for further theoretical study and the setup of empirical incentive technology policy.