Based on the model of a supplier and two competing manufacturers who produce substitutable products, the
equalization performance is studied including no cooperative innovation, cooperative innovation with no spillovers and
cooperative innovation with spillovers. The study results show that cooperative innovation is the dominant strategy for the
powerful manufacturer and supplier. It is further found that dominant manufacturer and supplier agree with the mechanism
of cooperative innovation according to three cases: 1) less competitive and high proportion of cost savings sharing; 2) highly
competitive and medium proportion of cost savings sharing; 3) fierce competitive and high proportion of cost savings sharing.