The leader-followers game model of knowledge transfer decisions in the technology innovation alliance is established to analyze the influences of knowledge transfer decisions between the chief and partners on the alliance cooperation innovation. The results show that the precondition of the existence and development of the alliance is that the knowledge marginal revenues of the chief firm are large enough. Partners transfer their knowledge capital according to the proportion structure of their own marginal revenues. There is a positive correlation between the knowledge transfer decision of the chief firm and its own marginal revenue, and there is a negative correlation between the knowledge transfer decision of the chief firm and the sum of partners’ marginal revenues, which may provide some theoretical supports for the selections of optimal dynamic competitive and cooperative relationship and managerial flexibility among alliance members.