Although the importance of merchant guilds for the commercial development of Europe is beyond doubt, scholars do not agree about why they emerged, persisted, and ultimately declined between the eleventh and eighteenth centuries. Historical studies usually focus on individual cases and idiosyncratic circumstances that restrict comparisons, whereas economic approaches based on game or contract theory often impose narrow assumptions on their models that tend to neglect two key features of these institutions: In imperfect markets, merchants used more than one institution to solve a given problem, and individual institutions often addressed more than one problem. However, a new methodological approach (maximum likelihood estimation) permits rigorous comparative analysis of the probability that merchants, under a given set of market and political circumstances, will delegate control of their dealings. This model requires only one assumption—that merchants relinquished such control only when they expected a positive return.