Based on the AJ model,this paper establishes a three-stage strategic game model under Stackelberg competition in the condition that the Stackelberg leader introduces R&D.The model concerns about the cost-reducing R&D and takes spillover effect into account.After R&D is introduced,the situation of the leader and consumer both improves and the situation of the price-taker improves only when the spillover effect is great.As the spillover increases,the leader's profit and the consumer's surplus decrease.In this model,the economy of equilibrium cost is lower than the economy of the social optimum cost.
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