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Institutions, rules, and equilibria: a unied theory

FRANK HINDRIKS and FRANCESCO GUALA

Journal of Institutional Economics / Volume 11 / Issue 03 / September 2015, pp 459 – 480

DOI: 10.1017/S1744137414000496, Published online: 16 October 2014

Link to this article: http://journals.cambridge.org/abstract_S1744137414000496

How to cite this article:

FRANK HINDRIKS and FRANCESCO GUALA (2015). Institutions, rules, and equilibria: a unied

theory. Journal of Institutional Economics, 11, pp 459-480 doi:10.1017/S1744137414000496

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Downloaded from http://journals.cambridge.org/JOI, IP address: 90.191.208.18 on 28 Oct 2015

Journal of Institutional Economics (2015), 11: 3, 459–480

C _

Millennium Economics Ltd 2014 doi:10.1017/S1744137414000496

First published online 16 October 2014

Institutions, rules, and equilibria: a

unified theory

FRANK HINDRIKS ∗∗

Faculty of Philosophy, University of Groningen, Groningen, The Netherlands

FRANCESCO GUALA∗∗∗

Department of Economics, Management and Quantitative Methods, Universit`a degli Studi di Milano, Italy

Abstract. We propose a new framework to unify three conceptions of institutions

that play a prominent role in the philosophical and scientific literature: the

equilibria account, the regulative rules account, and the constitutive rules account.

We argue that equilibrium-based and rule-based accounts are individually

inadequate, but that jointly they provide a satisfactory conception of institutions

as rules-in-equilibrium. In the second part of the paper we show that constitutive

rules can be derived from regulative rules via the introduction of theoretical terms.

We argue that the constitutive rules theory is reducible to the rules-in equilibrium

theory, and that it accounts for the way in which we assign names to social

institutions.

  1. Introduction

Institutions are ubiquitous. Even a simple description of who we are (two

academics) or what we do would be very difficult if we could not use institutional

terms such as ‘professor’, ‘university’, ‘tenure’, or ‘scientific journal’. Since our

behaviour is constantly influenced by institutional entities and institutional roles,

institutions have always been a central topic of research in the social sciences.

But institutions are also philosophically interesting, for a variety of reasons.

Institutions are peculiar products of human activities, to begin with, and may

hold the key to understand our special place in the natural world. Why are

humans the only animals who can build diverse social organizations and who

constantly invent new ways of living together? The other social animals do

not seem to have institutions – but then what are we referring to when we

talk about institutions? Are they particular patterns of behaviours? Or perhaps

∗Parts of this paper have been presented at the University of Helsinki, Erasmus University Rotterdam,

Lund University, the University of Turin, the Ecole Normale Superieure in Paris, and at a conference of

the Italian Society for Logic and Philosophy of Science. We have benefited from the remarks of many

participants, but we are particularly grateful to Mikael Cozic, Conrad Heilmann, Geoffrey Hodgson and

two anonymous referees of this journal.

∗∗Email: f.a.hindriks@rug.nl

∗∗∗Email: francesco.guala@unimi.it

October 28, 2015 - Posted by | Uncategorized

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