Abstract: A game model is built for the heterogeneous supply chain cooperation in which the manufacturer provides the seller with advertising subsidies, and the seller provides the manufacturer with research and development subsidies. And two kinds of default risk solutions are proposed. The analysis demonstrates that the R & D input of the manufacturer is positively correlated with the marginal revenue, and the seller's advertising input is positively correlated with the marginal revenue. In the manufacturer’s one-way subsidies game equilibrium, the relationship between the seller’s subsidies for advertising and the manufacturer’s subsidy coefficient is determined by the parameters and also in this equilibrium, the seller’s advertising input is negatively related to the manufacturer's R & D spending, with the subsidy coefficient positively related to the manufacturer’s marginal revenue and negatively related to the seller’s marginal revenue. In the case of the game equilibrium of the two-way subsidy of the manufacturer - seller supply chain, the supply chain benefit is greater than that of the one-way subsidy game equilibrium.