Institute of Economics, Academia Sinica, Nankang; Department of Economics, National Taiwan University; Institute of Economics, Academia Sinica, Nankang.Chang, Juin-jenJuin-jenChangLai, Ching-chongChing-chongLaiLin, Chung-chengChung-chengLin2006-11-142018-06-282006-11-142018-06-282003http://ntur.lib.ntu.edu.tw//handle/246246/2006111501275404This paper develops a double-sided moral hazard model to examine the productivity and employment effects of an intensifying profit-sharing scheme. We show that, in order to obtain the productivity-enhancing & employment-expanding effects, a profit-sharing scheme needs a supportive element of true sharing by the employer. If a double moral hazard exists for the worker’s effort & the firm’s declaration of true profits, a sharing scheme involving larger profit-related pay is not necessarily an effective policy for boosting work morale & employment. However, if the firmside moral hazard problem is absent, the favorable effects of profit sharing are achieved.application/pdf173340 bytesapplication/pdfzh-TWProfit sharingDouble moral hazardEfficiency wagesjournal articlehttp://ntur.lib.ntu.edu.tw/bitstream/246246/2006111501275404/1/6976.pdf