Hostname: page-component-8448b6f56d-cfpbc Total loading time: 0 Render date: 2024-04-18T16:15:15.465Z Has data issue: false hasContentIssue false
  • English
  • Français

INSTITUTIONS, RULE-FOLLOWING AND GAME THEORY

Published online by Cambridge University Press:  22 April 2016

Cyril Hédoin
Cyril Hédoin*
Affiliation:
University of Reims Champagne-Ardenne (France), Economics and Management Research Center REGARDS, 57B rue Pierre Taittinger, 51096 Reims Cedex. Email: cyril.hedoin@univ-reims.fr. URL: https://sites.google.com/site/cyrilhedoin/
Get access Rights & Permissions [Opens in a new window]

Abstract:

Most game-theoretic accounts of institutions reduce institutions to behavioural patterns the players are incentivized to implement. An alternative account linking institutions to rule-following behaviour in a game-theoretic framework is developed on the basis of David Lewis’s and Ludwig Wittgenstein's respective accounts of conventions and language games. Institutions are formalized as epistemic games where the players share some forms of practical reasoning. An institution is a rule-governed game satisfying three conditions: common understanding, minimal awareness and minimal practical rationality. Common understanding has a strong similarity with Ludwig Wittgenstein's concept of lebensform while minimal awareness and minimal practical rationality capture the idea that rule-following is community-based.

Keywords

InstitutionsRule-followingEpistemic game theoryCommon UnderstandingWittgenstein
Type
Articles
Information
Economics & Philosophy , Volume 33 , Issue 1 , March 2017 , pp. 43 - 72
Check for updates
Copyright
Copyright © Cambridge University Press 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Aoki, M. 2001. Toward a Comparative Institutional Analysis. Cambridge, MA: MIT Press.CrossRefGoogle Scholar
Aumann, R. J. 1976. Agreeing to disagree. Annals of Statistics 4: 1236–1239.CrossRefGoogle Scholar
Aumann, R. J. 1987. Correlated equilibrium as an expression of Bayesian rationality. Econometrica 55: 1–18.CrossRefGoogle Scholar
Aumann, R. J. 1999. Interactive epistemology I: knowledge. International Journal of Game Theory 28: 263–300.CrossRefGoogle Scholar
Aumann, R. J. and Dreze, J. H.. 2008. Rational expectations in games. American Economic Review 98: 72–86.CrossRefGoogle Scholar
Bacharach, M. 1987. A theory of rational decision in games. Erkenntnis 27: 17–55.CrossRefGoogle Scholar
Bacharach, M. 1994. The epistemic structure of a theory of a game. Theory and Decision 37: 7–48.CrossRefGoogle Scholar
Bicchieri, C. 2005. The Grammar of Society: The Nature and Dynamics of Social Norms. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Binmore, K. 2008. Do conventions need to be common knowledge? Topoi 27: 17–27.CrossRefGoogle Scholar
Bloor, D. 1997. Wittgenstein, Rules and Institutions. New York, NY: Routledge.Google Scholar
Bonanno, G. 2002. Modal logic and game theory: two alternative approaches. Risk, Decision and Policy 7: 309–324.CrossRefGoogle Scholar
Bonanno, G. and Nehring, K.. 1998. Assessing the truth axiom under incomplete information. Mathematical Social Sciences 36: 3–29.CrossRefGoogle Scholar
Chwe, M. S-Y. 2003. Rational Ritual: Culture, Coordination, and Common Knowledge. Princeton, NJ: Princeton University Press.Google Scholar
Cubitt, R. P. and Sugden, R.. 2003. Common knowledge, salience and convention: a reconstruction of David Lewis’s game theory. Economics and Philosophy 19: 175–210.CrossRefGoogle Scholar
Cubitt, R. P. and Sugden, R.. 2014. Common reasoning in games: a Lewisian analysis of common knowledge of rationality. Economics and Philosophy 30: 285–329.CrossRefGoogle Scholar
Fudenberg, D. and Levine, D. K.. 1998. The Theory of Learning in Games. Cambridge, MA: MIT Press.Google Scholar
Gintis, H. 2009. The Bounds of Reason: Game Theory and the Unification of the Behavioral Sciences. Princeton, NJ: Princeton University Press.Google Scholar
Greif, A. 2006. Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Greif, A., Milgrom, P. and Weingast, B. R.. 1994. Coordination, commitment, and enforcement: the case of the merchant guild. Journal of Political Economy 102: 745–776.CrossRefGoogle Scholar
Hédoin, C. 2014. A framework for community-based salience: common knowledge, common understanding and community membership. Economics and Philosophy 30: 365–395.CrossRefGoogle Scholar
Hédoin, C. 2015. Accounting for constitutive rules in game theory. Journal of Economic Methodology, forthcoming.CrossRefGoogle Scholar
Hindriks, F. 2009. Constitutive rules, language, and ontology. Erkenntnis 71: 253–275.CrossRefGoogle Scholar
Hindriks, F. and Guala, F.. 2015. Institutions, rules, and equilibria: a unified theory. Journal of Institutional Economics 11: 459–480.CrossRefGoogle Scholar
Lahno, B. 2007. Rational choice and rule-following behavior. Rationality and Society 19: 425–450.CrossRefGoogle Scholar
Lewis, D. K. 2002 [1969]. Convention: A Philosophical Study. Oxford: Blackwell.CrossRefGoogle Scholar
Maynard Smith, J. 1982. Evolution and the Theory of Games. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Milgrom, P. R., North, D. C. and Weingast, B. R.. 1990. The role of institutions in the revival of trade: the law merchant, private judges, and the Champagne fairs. Economics and Politics 2: 1–23.CrossRefGoogle Scholar
Perea, A. 2012. Epistemic Game Theory: Reasoning and Choice. New York, NY: Cambridge University Press.CrossRefGoogle Scholar
Rawls, J. 1955. Two concepts of rules. Philosophical Review 64: 3.CrossRefGoogle Scholar
Ross, D. 2009. Reply to Hands: on the Robbins-Samuelson argument pattern. Journal of the History of Economic Thought 31: 93–103.CrossRefGoogle Scholar
Ross, D. 2014. Philosophy of Economics. London: Palgrave Macmillan.CrossRefGoogle Scholar
Schelling, T. C. 1960. The Strategy of Conflict. Cambridge, MA: Harvard University Press.Google Scholar
Schotter, A. 2008 [1981]. The Economic Theory of Social Institutions. Cambridge: Cambridge University Press.Google Scholar
Searle, J. R. 1995. The Construction of Social Reality. New York, NY: Simon and Schuster.Google Scholar
Searle, J. R. 2010. Making the Social World: The Structure of Human Civilization. New York, NY: Oxford University Press.CrossRefGoogle Scholar
Sillari, G. 2005. A logical framework for convention. Synthese 147: 379–400.CrossRefGoogle Scholar
Sillari, G. 2008. Common knowledge and convention. Topoi 27: 29–39.CrossRefGoogle Scholar
Sillari, G. 2013. Rule-following as coordination: a game-theoretic approach. Synthese 190: 871–890.CrossRefGoogle Scholar
Skyrms, B. 1996. Evolution of the Social Contract. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Smit, J. P., Buekens, F. and du Plessis, S.. 2011. What is money? An alternative to Searle's institutional facts. Economics and Philosophy 27: 1–22.CrossRefGoogle Scholar
Smit, J. P., Buekens, F. and du Plessis, S.. 2014. Developing the incentivized action view of institutional reality. Synthese 191: 1813–1830.CrossRefGoogle Scholar
Stalnaker, R. 2006. On logics of knowledge and belief. Philosophical Studies 128: 169–199.CrossRefGoogle Scholar
Sugden, R. 2005. The Economics of Rights, Cooperation and Welfare. London: Palgrave Macmillan.CrossRefGoogle Scholar
Tomasello, M. 2014. A Natural History of Human Thinking. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Vanberg, V. J. 2004. The rationality postulate in economics: its ambiguity, its deficiency and its evolutionary alternative. Journal of Economic Methodology 11: 1–29.CrossRefGoogle Scholar
Vanderschraaf, P. 1998. Knowledge, equilibrium and convention. Erkenntnis 49: 337–369.CrossRefGoogle Scholar
Wittgenstein, L. 2010 [1953]. Philosophical Investigations. Malden, MA: Wiley-Blackwell.Google Scholar