This paper is intended to discuss and test some of the principal theoretical arguments for profit-sharing. We outline here a rigorous theoretical foundation for microeconomic motivating effects of profit related pay. The empirical results confirm this theory of cooperation and give clear evidence of the role of profit-sharing and worker share ownership in explaining some variations of productivity and profitability in medium-sized metal working firms in West Germany. On the other hand, there is a lack of empirical evidence for the macroeconomic effects of profit-sharing on employment and stagflation : work- sharing or variation of hours per worker (and not profit-sharing) seems to represent the main reason for low unemployment in Japan. Fur...