Abstract: By setting up a duopoly Bertrand competition mode with quality differences， the cost-reducing technology for transferring non-productive R & D firms was explored， the technology licensing and merging was analyzed， and the effects of different competition modes were studied. The results showed that non-productive R & D firms prefer a merger with high quality enterprises， and the licensing depends on the differentiation of goods quality and the degree of technology innovation in the two-part tariff， which may in turn deteriorate social welfare. In the case of minor innovation， R&D firms are supposed to opt for technology licensing; otherwise， they should choose merging. Different competition modes tend to exert varied effects on the technology transfer of non-productive R&D firms; therefore， a strategy should be adopted that takes into account licensing， merging and competition modes.

Key words: Bertrand competition, enterprise merger, quality difference, cost-reducing technology licensing, competition mode