The superior risk-bearing ability of commercial insurers is limited. Their comparative advantage depends on the calculability of property-liability loss distributions. Insurance contracts have their own transaction costs and these may outweigh the benefits of the commercial risk transfer. The...

The agent-based approach views an organization as a collection of agents, interacting with one another in their pursuit of assigned tasks. The performance of an organization in this framework is determined by the formal and informal structures of interactions among agents, which define the lines...

We model a firm in an institutional market setting, consisting of a production technology and its governance. The governance consists of a hierarchical firm structure, a cost efficiency parameter,and an internal pay system. The depth of the firm is determined by profit maximization under the...