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This study aims to examine the relationships between the rules that a cooperative membership decides upon and members' motives for action. It considers individual self-interest in relation with motives that are consistent with the values of cooperation.

This paper comprises two parts. The first is theoretical and discusses cooperative governance's features in the context of individual motives. The second part is empirical and based on survey data from Italian multistakeholder, worker-run social cooperatives. It uses cross-sectional data gathered from 4,134 workers and 310 managers in 310 cooperatives in Italy to provide evidence of rules and individual motives. Regression analysis confirms the existence of a linkage between individual self-interest and motives.

Rules mainly, but not exclusively, play an enabling function, which implies responding to both nonmonetary and monetary individual motives. With greater articulation within institutions – through the definition of multiple rights for accessing decision-making – the authors expect increases in individual capabilities to match motives with specific organizational rules in pursuit of consistent ends. This is confirmed by the association that the authors found between individual motives and commitment.

The authors’ illustration is limited to one specific type of cooperative, the social cooperative, in which prosocial motives are expected to be stronger than in other cooperative forms, although one could say that all cooperative models emphasize procommunity and prosocial aims. Data are cross-sectional and do not allow for the identification of causality, only of statistical relations' strength.

The continuous scrutiny and adaptation of motives and means imply that cooperators communicate and engage in a learning process.

While the institutional spheres that support investor-owned organizations and self-interested profit-maximizing behavior have been analyzed, a framework that accommodates personal control rights and a richer view of individual motives is lacking. The value added from the paper is to suggest one.

Both the academic literature and practitioners have long noted the need for an equity investment mechanism for worker-controlled firms that alleviates investor anxieties without undermining internal workplace democracy. The purpose of this paper is to outline one such possible mechanism.

The proposal locks together the interests of workers and external investors, via non-voting shares with dividends set by a pre-agreed value-added sharing formula. Each worker is paid a base wage, with the average across the firm being a pre-defined multiple of the national minimum wage. Any additional surplus is split into a number of equal “slices”, with each share receiving one slice as its dividend, and the average worker receiving a pre-agreed number of slices as a bonus.

Workers have an incentive to maximise their own incomes, and in so doing, will also automatically maximise the dividends received by investors, obviating the need for the shares to have normal voting rights. Working on this principle of aligned interests, the authors also discuss reinvestment, worker ownership of non-voting shares and possibilities for a secondary share market. The authors show how this proposal will be a significant step in aligning the interests of investors with owner-workers in a democratic, negotiated way that shares both risk and returns, thus making worker-controlled firms more attractive to equity investment.

In light of the recognised problem of underinvestment in worker-controlled firms and the risk of their degeneration, this paper will interest both academics and practitioners in employee ownership, co-operatives and various forms of workplace democracy.

This study examines the role of behavioural factors, such as confidence, optimism, pessimism and rational expectation, in affecting investment decisions in the Pakistani stock market.

Using daily trading data of Karachi Stock Exchange-100 index from January 2012 to December 2015, different regression models, including descriptive statistics and stationarity tests, are performed.

Results indicate that stock market trading has suffered from pessimistic behaviour of investors. In the first model, the authors find a positive sign of confidence and negative sign of optimism with the trading volume. The second model shows a positive role of confidence and rational expectations in affecting the trading volume in daily, Monday and Friday samples. The results of the third model show a negative sign of both optimism and rational expectation with the trading volume. Furthermore, the next model shows a negative sign of confidence combined with pessimism while testing their relationship with the trading volume. Finally, results of the final model suggest that optimism negatively affects the trading volume, and on the other hand, pessimism has a positive impact on the trading volume.

The method and empirical testing of behavioural biases and their relationship with economic variable used in this study seem to be a promising way to better understand the role of psychology in deriving financial decisions for academics and policymakers.

This study uses secondary data for measuring behavioural biases and decomposes the effect between rational expectation and behavioural biases.