A Theory of Mutual Formation and Moral Hazard with Evidence from the History of the Insurance Industry. Journal Article uri icon



  • Nonprofit, mutually owned insurance and banking organizations have; significant market shares in the insurance and banking industries. A first; step in a systematic study of these financial mutual is to examine the; reasons for their formation. Doing so provides empirical support for the; view that these mutual arose as an efficient means of addressing; contracting challenges caused by aggregate uncertainties and moral hazard.; A formal model with this property is presented. We argue that information; asymmetries do more to explain the kinds of contracts offered by financial; mutual than do agency problems between owners, managers, and customers. Article published by Oxford University Press on behalf of the Society for Financial Studies; in its journal, The Review of Financial Studies.

publication date

  • January 1, 1995

Date in CU Experts

  • October 21, 2013 3:20 AM

Full Author List

  • Smith BD; Stutzer M

author count

  • 2

Additional Document Info


  • 8


  • 2