R&D Outsourcing Policy with Input Spillovers Based on Multi-Outsourcer and Multi-Supplier

In this paper, a multi-outsourcer and multisupplier R&D outsourcing model with input spillovers is proposed to study the R&D outsourcing policies of outsourcers and R&D suppliers. The optimal outsourcing policies of outsourcers and the optimal investment policies of suppliers are obtained and the effects of outsourcing parameters on the policies of outsourcers and R&D suppliers are analyzed. It is found that with the rise of input spillovers, R&D capability or unit market return of any supplier, the R&D investment of the supplier with higher R&D capability or unit market return increases while its profit decrease. The total R&D investment and profit of two suppliers increases with the rise of the input spillovers from supplier with lower R&D capability or unit market return, and the R&D capability or unit market return of any supplier.