Abstract: The leader-followers game model of knowledge transfer decisions in the technology innovation alliance is established to analyze the influences of knowledge transfer decisions of the core firms and partner enterprises on the alliance cooperation innovation. The results are as follows: The preconditions for the existence and development of the alliance are that the knowledge marginal revenues of the core firms are large enough. Partner enterprises 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 core firm and its own marginal revenue, and a negative correlation between the knowledge transfer decision of the core firm and the sum of partners enterprises marginal revenues, which might provide some theoretical supports for the selections of optimal dynamic competitive and cooperative relationship and managerial flexibility among member enterprises.

Key words: innovation alliance, knowledge transfer, knowledge output, leader-followers game