Mutualism in the 21st Century : The Why, When, and How behind Successful Risk-Sharing Institutions

Abstract

During the last 15 years, the number of institutions for collective action has risen significantly in Europe, and especially in the Netherlands. Where market- or government arrangements are deemed insufficients, goods and services are provided locally in energy, care, and food coops. Of particular interest is the revival of self-organized insurance in mutual insurance associations (mutuals), which require cooperation and trust under uncertainty. Members share risk and pay monthly contributions to support each other without knowing whether they ever need support, how many others need support, and whether these others remain a member to repay the favor in the future.

Uncertainty severely complicates collective action and makes cooperation more fragile. At any moment members can decide to withdraw when support requests are too high. Why do some risk-sharing initiatives succeed, while others don't? To what extent does success depend on the individuals involved or the initiative's social and institutional properties? This dissertation answers these questions using a multidisciplinary approach. The results of agent-based simulations, abstract experiments and surveys among members of a Dutch risk-sharing organization are integrated to derive multi-faceted evidence on success factors for collective action and uncover institutional opportunities for optimizing success of mutuals.