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Firms can donate a share of profits to charity as a form of corporate social responsibility (CSR). Recent experiments have found that such initiatives can induce higher effort by workers, generating benefits for both sides of the labour market. We design a novel version of the gift-exchange game to account for self-selection, and find that wages remain the most effective incentive to attract and motivate workers, with corporate donations playing a smaller role than previously suggested. We also show that firms substitute donations to charity with lower wage offers, keeping their profits constant but reducing workers' earnings. Initiatives of corporate philanthropy can thus be marginally beneficial for firms, but considerably costly for workers. [ABSTRACT FROM AUTHOR]

For pools of essential patents I study whether a pool's sharing rule is stable against arbitrage, so that the pool's members have no incentive to trade patents. I show that the only stable rule is the numeric proportional rule, which gives each member a share of the pool's profit equal to its share of the pool's patents. I study how the stable rule affects firms' incentives to participate, and I show that firms with few patents tend to remain outside the pool. I look at the trade off between stability and participation, and I show that as trade dilutes their shares, members prefer the stable rule. I consider individual licenses, stand-alone patents, integration, and R&D. The results suggest that pools use the stable rule to maximize their founding members' worth. They help us understand why the numeric proportional rule is so common among pools of essential patents. [ABSTRACT FROM AUTHOR]

Abstract: An auction is used to sell a resource that is then developed by the winning buyer to generate a profit. Two forms of payment are considered: (i) charging the winning buyer a one-time payment; (ii) charging an initial payment followed by a profit sharing contract (PSC) that divides the realized profit between the seller and the winning buyer. A symmetric interdependent values model with a risk neutral seller and either risk averse or risk neutral buyers is considered, along with the second price and English auctions. The properties of those PSCs in which either positive profits or both profits and losses are split according to a fixed fraction are studied. The sellerʼs expected revenue is shown to be larger in a class of general PSCs with nontrivial profit sharing than in an auction with only a one-time payment. [Copyright &y& Elsevier]

Abstract: In most commercial fisheries, the crew is remunerated via some form of the lay system. Under the lay system, the crew is paid with a share of revenues or a share of revenues less costs. Naturally, the presence and the functioning of the lay system are well known and accepted as one of fishery''s important institutions. Compared with share contracts in agriculture, however, the lay in fisheries has garnered relatively little research. This article has two goals. First, we provide an explanation for the existence of the lay system as an incentive mechanism to alleviate a potential team agency problem. This explanation of the lay system explains anomalies, such as the presence of wages in some fisheries, that are odds with the theory of pure risk sharing. Second we show the implications of the lay system for econometric modeling of fisheries and for understanding firm behavior. In general we conclude that models that fail to account explicitly for the incentive properties of shares are likely to provide poor representations of fishing firm behavior. The thrust of the paper is that the formation and working of the lay system are a fundamental force in fisheries influencing firm behavior and research results in a way that has been largely ignored. [Copyright &y& Elsevier]