Mechanism Design For Vertical Cooperative Innovation In Supply Chain Based On Double-Sided Moral Hazard, Spillover Effect

With the development of the information technology, enterprise sharply compete with other in market, shortening of product life cycle and technology life cycle. Innovation is an enterprise's key source for obtaining core competitiveness. There are three innovation modes, including independent technology innovation, acquiring from external technology market, and cooperative innovation. Because uncertainty of innovation and huge investment for single enterprise, it is becoming increasingly difficult that an enterprise does technology innovation relying solely on its limited internal resources. Because cooperative innovation has the advantage of being able to supply resources each other, share in costs and risks, form synergies, know or control partners'technology, market and product, influence market competition, obtain funding and policy support from government,as a result, Cooperative innovation has become more and more enterprises'preferred approach to do technology innovation.However, 60% of cooperative innovation ended in failure within 6 months after establishment. In China, the success rate of cooperative innovation is only about 50%. As Double-Sided moral hazard and profit sharing are the key factor causing the instability of cooperative innovation, if we can design and cooperative innovation mechanism, through choosing a reasonable profit-sharing arrangement to motivate members of cooperative innovation, to voluntarily give up opportunism, the efficiency and competitiveness of cooperative innovation will be greatly enhance.In view of existing situation that Double-Sided moral hazard and unfair profit sharing cause low efficiency and high failure rate of cooperative innovation in China, this paper studies how to design a practical cooperative innovation mechanism, through choosing a reasonable profit-sharing arrangement and cooperative innovation mode, to prevent Double-Sided moral hazard in cooperative innovation, stimulate members of cooperative innovation to reveal their private information truthfully and enhance R&D investment or commit enough efforts, as a result, the cooperative innovation becomes successful. The conclusions of this paper are supposed to be a theoretical guidance for the strategy- or policy-making of enterprises, universities, research institutions and government.The main research contents of this paper are as follows.â‘ Design of sequential mechanism for cooperative innovation based on Double-Sided moral hazardThis part is composed of Chapter 3, it is studied that how to design sequential mechanism of the non-renegotiation contract under the double moral hazard between R&D institutions and enterprise, make two sides directly send private information, prevent moral hazard of execution of the contract,and can reduce the opportunistic behavior, make the two sides insist in cooperation in faith, improve the level of relationship-specific investments, to achieve the sound development of cooperation innovation.â‘¡Study on vertical Cooperation innovation strategy and cost sharing mechanisms in Supply ChainThis part is composed of of Chapter 4, it is paper studies the investment police of vertical cooperative innovation in a two-stage supply chain which is composed with an upstream monopoly and several downstream enterprises. Two cost sharing mechanisms are developed, the profit of all members in the supply chain and the customer surplus of the buyer of final goods are analyzed. It is shown that the profit of all members in cooperation innovation and the customer surplus will be raise, but the profit of enterprises out of cooperation will be reduced because of cooperation.â‘¢Mechanism Design for Cooperative Innovation in Supply Chain Based on Vertical and Horizontal SpilloverThis part is Chapter 5. In this part, Six game models of cooperative innovation in Supply Chain with Vertical and Horizontal Spillover are developed, enterprises'policies of innovation and production, as well as the related social welfare are studied. It is showed that the vertical cooperation and upstream horizontal cooperation will increase the input of innovation and output of product but have an uncertain effect on the profit of enterprises; the vertical spillover effect and the upstream horizontal spillover effect will increase the input of innovation, output of product and social welfare. Government should encourage and support these kinds of cooperation, and subsidize them when necessary, and increase the spread speed of innovation result to enhance the spillover effect, to stimulate enterprises enlarge their innovation commitment and product output, and as a result the social welfare will be increased.â‘£Mechanism Design for Cooperative Innovation in Supply Chain Based on mixed spilloversA vertical cooperative innovation model with mixed spillovers, including exogenous spillovers and endogenous spillovers, is developed. The cooperation policies for non-cooperation, half-cooperation and total-cooperation are investigated and compared with each other. A profit allocation mechanism for prompting total-cooperation is established. It is shown that the optimal endogenous spillovers is the maximum one for all kinds of cooperation, and the income and outcome of innovation, enterprise's profit, output of final product, customer's surplus and social welfare under total-cooperation are the maximum ones, and those under non-cooperation are the minimum ones.The theoretical and methodological innovations of this paper are as follows.â‘ Study on sequential mechanism for cooperative innovation under the non-renegotiation contract by introducing third-party arbitration institutions.Due to opportunistic behavior in cooperative innovation process. This article first set non-renegotiation after business , which the two partners strictly fulfilled with the signed contract, but not to re-negotiate and sign a new contract. On this basis, this paper is different from the existing incentive mechanism for cooperative innovation ,which reallocate profit after business. This paper not only consider the excitation feedback after cooperation, but also design sequence mechanism for cooperative innovation by introducing a third-party arbitration organizations, establish a game model of cooperative innovative, through controlling the collaborative innovation process, so that the partners real reveal their private information from their own maximum benefit, to achieve two sides sustained positive cooperative innovation.â‘¡Build the three-stage game model of vertical cooperative innovation in the supply chain, study on the vertical cooperative innovation strategies and cost sharing mechanisms in supply chain.For cost-sharing mechanisms in the supply chain upstream and downstream enterprises are poorly designed, which lead to the upstream and downstream enterprises is difficult to continue to participate in cooperative innovation. This paper considered the two degree supply chain consisting of an upstream oligopoly enterprises and a number of downstream firms, established a three-stage game model in vertical cooperation innovation, study on enterprises investment strategy under different conditions, we propose two costs sharing mechanism of cooperative innovation, to analyse cooperative innovation effect the profits of upstream and downstream enterprises and the consumer surplus of the end product buyers.â‘¢In view of vertical and horizontal spillover, cooperative innovation with mixed spillover. This paper is study on mechanism of cooperative innovation under different cooperative innovation modes.Real cooperative innovation process, because of spillover effect, it is difficult to design effective cooperative innovation mechanisms to reduce the negative spillover effects, as much as possible so that technology spillovers endogenous, making the effort of innovative enterprises down.This paper considers the innovation horizontal spillover effect is different in the same level of inter-firm in the supply chain, vertical spillover effect is change under different investmentor and beneficiary of spillover effect, to build six game models of cooperative innovation, to study on enterprises'policies of innovation and production under different cooperative innovation modes, to analyse the relation with enterprise profit and spillover effect, as well as output and social welfare .In view of exogenous spillovers and endogenous spillovers, to build a vertical cooperative innovation game model in the supply chain with mixed spillovers. The cooperation contract for partial -cooperation and total-cooperation are investigated and compared with each other. A profit allocation mechanism for prompting total-cooperation is established, which give decision-making reference of cooperative innovation strategy for upstream and downstream enterprises in the supply chain.