IN A STUDY of West German metal working industry, FitzRoy and Kraft (F-K) [1986] have concluded, inter alia, that Profit-sharing and employee ownership both have strong and robust positive effects on profitability, but with none of feedback from profits to profit-sharing which is sometimes hypothesized (p. 113). While findings of this study are of potential interest, their result regarding feedback is quite surprising. It means that sharing do not profit! The link from higher residual (indicated by ROC, rate of return on capital) to a larger amount (PROSH) received by employees in form of a is called feedback by authors. This feedback should always exist by very nature of sharing. In F-K's own model, equations (1) and (3) together imply that workers' is a fraction a of total profit, so that it should be fraction cx/(1 - a) of residual profit. Yet, F-K's regressions show that PROSH does not depend on ROC.1 At same time, they find AGE (the number of years since introduction of sharing) to be most important explanatory factor in explaining PROSH, with extremely high t-values for its coefficients. The authors interpret this as the result of a process, by which and employees learn to cooperate under profit-sharing as an incentive scheme (pp. 125, 127). This, in combination with no-feedback result, tells us that as years go by after first introduction of sharing, increase profit share to employees while its amount is unrelated to itself. This seems to be an unusual system of sharing indeed. The authors' finding that feedback does not exist also creates a problem with specified econometric model. They use AGE at first stage to estimate PROSH which is then used as an instrument variable to explain ROC. But their theoretical model dictates that immediate effect of AGE falls on ROC. Their learning process argument, which says that with higher AGE, firms and employees learn to cooperate, has consequence that revenue per worker, as determined by equation (8), increases. This equation