Abstract: According to the current pricing system and procedure of military aviation product in China, a theoretical analysis model was built, which was used to describe and analyse the game behaviors of players in the market and their effects on efficiency under the current pricing system based on cost. The research results show that under current pricing system, manufacturers have motivation to exaggerate their cost. The cost exaggerating behaviors of upriver manufacturers not only brought themselves the benefits, but also brought the profit contributions to downriver manufactures, which have motivation to connivance such behaviors of upriver manufacturers. The cost exaggerating behavior of upriver manufacturer has greater influence on the price of final product than downriver manufacture’s. Some suggestions were proposed to deal with these problems and improve the current pricing system.