Rules, Equilibria and Virtual Control: How to Explain Persistence, Resilience and Fragility

Frank Hindriks*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Scopus)

Abstract

Institutions are often regarded either as rules or as equilibria sustained by self-interested agents. I ask how these two theories can be combined. According to Philip Pettit’s Virtual Control Theory, they explain different things: rules explain why regularities persist; self-interest why they are resilient. Thus, his theory reconciles the two theories by adjusting their domains of application. However, the available evidence suggests that rules and self-interest often combine as sources of motivation. Because of this, it is better to integrate the theories rather than to reconcile them. Inspired by Cristina Bicchieri’s theory of social norms, I incorporate the notion of rule-following into a game-theoretic account of institutions. According to the resulting Rules-and-Equilibrium Theory, institutions are rule- or norm-governed social practices. The theory does not only explain their persistence and resilience, but also their fragility, which provides another reason for preferring the proposed integration to Pettit’s reconciliation.

Original languageEnglish
Pages (from-to)1367-1389
Number of pages23
JournalErkenntnis
Volume88
Issue number4
DOIs
Publication statusPublished - Apr-2023

Cite this