Technology spillover and cooperate R&D

Based on expanding AJ model, the three-stage cournot game model considering horizontal and vertical technology spillovers is built. From the equilibrium solution by reverse induction, the effects on firm R&D investment from horizontal and vertical spillovers are investigated under different cooperate R&D modes. It is found that except in the case of noncooperation, firms´ R&D investment always increase with the rise of vertical spillover, and under horizontal and mixed cooperation, R&D investment increase with the rise of horizontal spillover. And then, the comparison of different cooperate R&D modes in terms of externalities shows that: when the level of technology spillovers is comparatively low, vertical cooperation can maximize R&D investment ; When the level of technology spillovers is comparatively high, mixed cooperation is the best choice for firm to increase R&D investment.