| This study consists of three essays, each of which attempts to provide a theoretical explanation for the observed prevalence of various institutional structures in the marketplace. Specifically, the first essay provides an imperfect information-based justification for the existence of financial intermediaries with some thoughts on the role of diversification with risk averse agents and risk neutral firms in situations involving moral hazard. In the second essay, a model is developed which is used to explain why limited partnerships coexist with other organizational forms. Finally, the third essay looks at the possibility of theft as a reason for the existence of safeguarding services such as bank deposits and insurance companies, and subsequently, how changes in the reserve requirement imposed by the Federal Reserve on bank deposits may affect the supply and demand for bank deposits, as well as, insurance contracts. |
