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Asymmetric Information and the Form of Enterprise: Capitalist Firms and Consumer Cooperatives


  • Kazuhiko Mikami


This paper examines the implication of different enterprise forms -- capitalist firm and consumer cooperative -- for the level of accident risks, assuming informational asymmetry between the firm and the outside trader. Our conclusion is that, in order to reduce accident risks, we should choose an enterprise form that gives the firm's management rights to those who would incur the most substantial loss in case of an accident. This result depends upon how effectively the mechanism of signaling works under the firms, given a certain distribution of expected losses over individuals.

Suggested Citation

  • Kazuhiko Mikami, 2007. "Asymmetric Information and the Form of Enterprise: Capitalist Firms and Consumer Cooperatives," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 297-312, June.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200706)163:2_297:aiatfo_2.0.tx_2-g

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    References listed on IDEAS

    1. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
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    Cited by:

    1. Laura Abrardi & Luca Colombo & Pier Angelo Mori, 2016. "Customer Ownership And Quality Provision In Public Services Under Asymmetric Information," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1499-1518, July.
    2. Mikami, Kazuhiko, 2010. "Capital procurement of a consumer cooperative: Role of the membership market," Economic Systems, Elsevier, vol. 34(2), pages 178-197, June.

    More about this item

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • P12 - Economic Systems - - Capitalist Systems - - - Capitalist Enterprises
    • P13 - Economic Systems - - Capitalist Systems - - - Cooperative Enterprises


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