Abstract: Abstract： A knowledge division decision model for the knowledge chain’s research and development is constructed. It shows that the development must be undertaken by the agent, and the research can be undertaken either by the core enterprise or the agent. The first order payment under the conditions of full delegation and partial delegation is also analyzed. The model research indicates that the higher the research benefits the core enterprise gains in its technological ability, the more efficiently the knowledge can be transferred from the research phase to the development phase, and the more important the research than the development is, the more likely the core enterprise confines the research in its border.

Key words: knowledge chain, knowledge division, decision model