Upvoted for interest, but I’m not sure you’ve gone deep enough into the model. Specifically, you’re mixing the analysis based on whether the institution in question is a closed system, or a partial equilibrium of participants, who also have extra-institutional interactions and goals.
suboptimal Nash equilibrium: Non of the stakeholders can do better by trying to solve it on their own. Such problems are, almost by definition, unsolvable.
Way oversimplified. that’s the whole point of institutions—to give avenues for trade and outside-the-equilibrium motivation, in order to let stakeholders solve it together, rather than on their own.
It eventually destroys the institution and, if everything goes well, replaces it with a different one where at least the most blatant problems are fixed.
If these are unsolvable equilibria, how does a new institution fix it? What are the constraints that keeps the old institution from solving it when a new one can? Wouldn’t you expect the new ones to be much worse at the problems that the old one _did_ solve?
Yes, it’s a toy model. The idea is that equilibrium is only defined with a respect to the game being played. In this case the game is the set of rules (both formal and informal) used in the institution. If institution dies there are no rules. When a new one is crated a new set of rules is established, with different equilibria.
But whether the new rules will be better than the old ones, there’s no guarantee. The protesters in arab spring in Syria hoped for better institutions, but they’ve got civil war instead. The crucial bit seems to be that it’s controlled death. What exactly that means though is unclear.
Hmm. I think that toy model is pretty divorced from reality, and any correspondence to actual groups is not due to the modeled factors, but to unstated assumptions about individual and collective (extra-institutional) behaviors.
Upvoted for interest, but I’m not sure you’ve gone deep enough into the model. Specifically, you’re mixing the analysis based on whether the institution in question is a closed system, or a partial equilibrium of participants, who also have extra-institutional interactions and goals.
Way oversimplified. that’s the whole point of institutions—to give avenues for trade and outside-the-equilibrium motivation, in order to let stakeholders solve it together, rather than on their own.
If these are unsolvable equilibria, how does a new institution fix it? What are the constraints that keeps the old institution from solving it when a new one can? Wouldn’t you expect the new ones to be much worse at the problems that the old one _did_ solve?
Yes, it’s a toy model. The idea is that equilibrium is only defined with a respect to the game being played. In this case the game is the set of rules (both formal and informal) used in the institution. If institution dies there are no rules. When a new one is crated a new set of rules is established, with different equilibria.
But whether the new rules will be better than the old ones, there’s no guarantee. The protesters in arab spring in Syria hoped for better institutions, but they’ve got civil war instead. The crucial bit seems to be that it’s controlled death. What exactly that means though is unclear.
Hmm. I think that toy model is pretty divorced from reality, and any correspondence to actual groups is not due to the modeled factors, but to unstated assumptions about individual and collective (extra-institutional) behaviors.