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Moretto, M., and Rossini, G.-The Shut-Down Option and Profit SharingAoki's profit-sharing firm organization is associated with the option evaluation model of investment. The firm is endowed with a shut-down option it can exercise when the market price, assumed to be uncertain, falls below a certain trigger level. The distributive parameter is the result of a bargaining process and is influenced by the shut-down option. Workers can delay the firm's shut down by sharing not only profits but also losses. In that case, the workers' policy changes both the optimal distributive parameter and the trigger price in a nontrivial way. The overall result implies an increase in the profit share going to shareholders as compared to Aoki's original finding.

The behaviour of labour managed and pro®t seeking ®rms in a Cournot duopoly with capital strategic interaction is analysed. When a pure labour managed duopoly is considered, ®rms choose their capital commitments according to the level of the interest rate, unlike what usually happens when only pro®t maximising ®rms operate in the market. If we consider a mixed duopoly, the pro®t maximising ®rm under-invests while the labour managed ®rm over-invests regardless of the rental cost of capital.

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