Managerial Economics and Organizational Architecture 7th Edition by James Brickley solution manual

The initial reaction to this argument should be skepticism. Mutual insurance companies have existed for a long time in a competitive environment and thus are likely to have been an efficient form of organization in the past (economic Darwinism). It is possible that the environment has changed in a manner to make this form of organization undesirable. However, before this argument is accepted, it is important to identify these changes and to analyze carefully why mutual insurance companies are unlikely to survive in the changed environment.