Innovation and waste in supply chain management
- M. Peitz, D. Shin
- Journal of Economic Behavior & Organization, vol…
Vertical cooperative innovation during supply chain may overcome the high investment in R&D and uncertainty, and it also can avoid risks, shorten product development cycles. In this paper, a vertical cooperative R&D model is built in the upstream monopoly supply chain based on game theory. The following conclusions is drawn: Monopoly in the upstream vertical cooperative R&D model, with the absorptive capacity of enterprises and the overflow level of the increase in corporate R&D results, the upstream and downstream businesses will increase profits. The upstream monopoly enterprise cannot force the downstream companies to join the cooperative R&D alliance, and undertake research and development costs too much. To maximize profits, the upstream companies can only travel companies in the following bound for the standard to determine the number of member companies and the downstream cost-sharing ratio.