Abstract: Whether can prevent free ride and increase member's investment is one of the key factor for success in the cooperative R&D.In this research,the investment polices of parallel and gathered R&D alliance members with input spillovers under equal and proportional profit sharing arrangement weve studied, and the impact of input spillovers,profit sharing arrangement and form of alliance on members' investment polices were analyzed. It was shown that input spillovers can prevent free ride and increase member's investment,gathered R&D alliance and sharing profit proportionally are better than their counterpart when mark return is small,but,when market return is big,form of alliance and profit sharing arrangement have impact on member's investment policy,so R&D alliance should share profit equally to make a success in cooperative R&D.

Key words: input spillovers, form of alliance, profit sharing arrangement, R&D alliances