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Marine Insurance in Britain and America, 1720–1844: A Comparative Institutional Analysis

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  • Kingston, Christopher

Abstract

This article examines how the marine insurance industry evolved in Britain and America during its critical formative period, focusing on the information asymmetries and agency problems that were inherent to the technology of overseas trade at the time, and on the path-dependent manner in which the institutions that addressed these problems evolved. I argue that the market was characterized by multiple equilibria because of a potential lemons problem. Exogenous shocks and endogenous institutional development combined to bring about a bifurcation of institutional structure, the effects of which persist to the present day.

Suggested Citation

  • Kingston, Christopher, 2007. "Marine Insurance in Britain and America, 1720–1844: A Comparative Institutional Analysis," The Journal of Economic History, Cambridge University Press, vol. 67(2), pages 379-409, June.
  • Handle: RePEc:cup:jechis:v:67:y:2007:i:02:p:379-409_00
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    References listed on IDEAS

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    1. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters,in: Understanding the Process of Economic Change Princeton University Press.
    2. de Roover, Florence Edler, 1945. "Early Examples of Marine Insurance," The Journal of Economic History, Cambridge University Press, vol. 5(2), pages 172-200, November.
    3. Kingston, Christopher & Caballero, Gonzalo, 2009. "Comparing theories of institutional change," Journal of Institutional Economics, Cambridge University Press, vol. 5(02), pages 151-180, August.
    4. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 629-649.
    5. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80.
    6. Banner, Stuart, 1998. "The Origin of the New York Stock Exchange, 1791-1860," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 113-140, January.
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    Cited by:

    1. Brousseau, Eric & Raynaud, Emmanuel, 2011. "“Climbing the hierarchical ladders of rules”: A life-cycle theory of institutional evolution," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1), pages 65-79.
    2. Brousseau, Eric & Garrouste, Pierre & Raynaud, Emmanuel, 2011. "Institutional changes: Alternative theories and consequences for institutional design," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 3-19, June.
    3. Yang Hu & Les Oxley, 2017. "Exuberance in Historical Stock Prices during the Mississippi and South Seas Bubble Episodes," Working Papers in Economics 17/08, University of Waikato.
    4. Frehen, Rik G.P. & Goetzmann, William N. & Geert Rouwenhorst, K., 2013. "New evidence on the first financial bubble," Journal of Financial Economics, Elsevier, vol. 108(3), pages 585-607.
    5. Wallis, John Joseph, 2011. "Institutions, organizations, impersonality, and interests: The dynamics of institutions," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 48-64, June.
    6. repec:kap:pubcho:v:176:y:2018:i:3:d:10.1007_s11127-018-0573-x is not listed on IDEAS
    7. Mendonça, Sandro, 2013. "The “sailing ship effect”: Reassessing history as a source of insight on technical change," Research Policy, Elsevier, vol. 42(10), pages 1724-1738.

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    JEL classification:

    • N00 - Economic History - - General - - - General

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