Road Asphalt Industry Strategic R & D Behavior Analysis

The research and development (R&D) is a very important issue in the Industrial Organization. Since 1980s, John Beath, Yannis Katsoulacos and David Ulph and other economists, have began to use the Game Theory, analyzing how the firm's R&D affects the market equilibrium and the social optimum. This topic is a front of the Industrial Organization, which is called Strategic R&D Theory. The theory, involving the Game Theory and the mathematical model, concerns the process the market equilibrium and the result of the social optimum, when a firm, drivened by not only the profit but also the strategic advantage, takes R&D as a competitive strategy and tries its best to defeat its rivals.In this thesis, the author intends to take analysis of the R&D behavior in the Chinese paving asphalt industry by using the Strategic R&D Theory. There are two reasons for choosing the Chinese paving asphalt industry as the object. Firstly, owing to the property of the paving asphalt, quality competition will be more remarkably inevitable in the paving asphalt industry compared to in other industries. Meanwhile, China has joined in the WTO, so, faced with the impact of famous asphalt brands from overseas and the much fiercer competition than before, the Chinese paving asphalt firms have to improve the quality in order to gain the profit in future. Secondly, the oligopoly as well as other characteristics of the Chinese paving asphalt industry is according to the assumptions of "tournament models" of the Strategic R&D Theory. For example, the duopoly model and the research and development competition model can be used to analyze the Chinese paving asphalt industry before 1998 and after because of some accordance between them.Several scholars, whose papers can be found in many authoritative publications, have paid much attention to the Chinese paving asphalt industry. Their studies mainly focus on the status of the Chinese paving asphalt industry, comparing the international and domestic paving market, summarizing the competitive strategy of the domestic paving asphalt firms and emphasizing that improving the quality is the key for the firm to win in competition. But these analyses often lack concise...