Shared Beliefs & Coordination

I recently stumbled across a couple of really great definitions of “institution” and, of course, I share them here with you.

An institution is “a self-sustaining system of shared beliefs as to a salient way in which the game [coordinated action toward some goal] is repeatedly played.” (Aoki’s Toward a Comparative Institutional Analysis 2001, 10)

aoki

These shared belief systems serve “as devices for reducing uncertainty, simplifying decision making, and promoting cooperation among human agents so that the costs of coordinating economic and other activities can be lowered.” (Furubotn & Richter’s Institutions & Economic Theory 2005, 7)

F and R

A.K.

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