This paper derives a two-tier supply chain model with many firms in each tier. The upstream firms engage in cost-reducing R&D activities. Under the case of R&D competition, the paper discusses how the changes in R&D spillover, R&D efficiency and the numbers of the manufacturers and the suppliers affect the R&D expenditures, the quantities and the profits. Then, R&D cooperation is considered. And what effects arise with the changes in the R&D spillover and the degree of cooperation are studied.
Huo, Pei-Jun; Chen, Jian; and Chen, Ji-Xiang, "Upstream R&D Competition and Cooperation in a Two-Tier Supply Chain" (2002). ICEB 2002 Proceedings (Taipei, Taiwan). 18.