Do NPC-s taken prisoner drop loot?

Sometimes when I kill a character, they talk to me after the battle and beg for mercy. Do they still drop their loot even if I take them prisoners?

I couldn't really check by myself because it happened to me once after a very hard battle and I didn't have patience to repeat (I just killed the guy outright, he deserved it).

If not, then would they drop the same stuff if I killed them in the prison?

Solution 1:

No they do not and you simply miss their loot. If by chance somebody offers something for one of your prisoners before they escape, then it's worth it. Otherwise it's not.