Abstract
By establishing extended Hotelling model, this article introduces technology spillovers coefficient and innovation rate two variables. In single enterprises innovation mode analyses duopoly enterprises research and development input, equilibrium price, equilibrium yield and equilibrium profits. Result shows that an enterprise's technological innovation can improve enterprise product price, market share and enterprise profit, which would encourage other enterprises following technological innovation. Because of spillovers negative effects, enterprise innovation motivation will be decline. Therefore, government should carry out subsidies to innovation enterprise to improve innovation enterprise positive to encourage innovation. Technological innovation enterprise inclines low achievement spillovers; non-technological innovation enterprise inclines high achievement spillovers. Technological innovation input is negative relation with technology spillovers coefficient, and negative relation with the innovation rate.
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