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Be the first to write a review About this product. About this product Product Information Understanding Institutions proposes a new unified theory of social institutions that combines the best insights of philosophers and social scientists who have written on this topic. Francesco Guala presents a theory that combines the features of three influential views of institutions: as equilibria of strategic games, as regulative rules, and as constitutive rules. Guala explains key institutions like money, private property, and marriage, and develops a much-needed unification of equilibrium- and rules-based approaches.

Although he uses game theory concepts, the theory is presented in a simple, clear style that is accessible to a wide audience of scholars working in different fields. Outlining and discussing various implications of the unified theory, Guala addresses venerable issues such as reflexivity, realism, Verstehen, and fallibilism in the social sciences.

He also critically analyses the theory of "looping effects" and "interactive kinds" defended by Ian Hacking, and asks whether it is possible to draw a demarcation between social and natural science using the criteria of causal and ontological dependence. Focusing on current debates about the definition of marriage, Guala shows how these abstract philosophical issues have important practical and political consequences. Moving beyond specific cases to general models and principles, Understanding Institutions offers new perspectives on what institutions are, how they work, and what they can do for us.

Additional Product Features Dewey Edition. Show More Show Less. Any Condition Any Condition. Another goal was to show that an adequate understanding of the nature of institutions helps resolve old conceptual and methodological problems in the philosophy of social science. While some of these problems simply disappear, others become more tractable once they are seen from the perspective of the unified theory. The book owes a lot to numerous friends and colleagues whom I have had the luck to meet and to work with over the years.

My first debt goes to my former colleagues at the University of Exeter. As a graduate student I found philosophical debates on the nature of society rather uninteresting, but I began to change my mind when Barry Barnes and Nigel Pleasants introduced me to the Wittgensteinean tradition in the philosophy of social science, and proved by way of example that my preconceptions were wrong. An important event for the genesis of this book was a seminar on rules and institutions that Frank Hindriks gave in Milan in the summer of In his doctoral dissertation, written a few years earlier, Frank had shown how to derive constitutive from regulative rules.

Although I had read his dissertation back then, however, I had spectacularly failed to see the importance of this result. When Frank presented the same ideas in Milan, I realized that they could be used to build a unified theory of institutions based on the game-theoretic notion of correlated equilibrium. The unified theory has been outlined in two articles coauthored with Frank, and constitutes the bulk of the first part of the book. Although Frank and I do not agree on everything, it is fair to say that this book would have been a lot different without his contribution.

Over the years many other friends and colleagues have helped me. I owe particular gratitude to a group of colleagues who have read the semifinal draft of the manuscript, have given constructive suggestions, and have spotted a number of mistakes that I had overlooked. The published version is far superior to its predecessor drafts thanks to their comments.

I am very grateful to all of them for pushing us to correct and clarify our views on institutions. I am grateful also to the Ecole Normale Superieure for its hospitality in Paris during February , and for the opportunity to give a series of seminars on the topics of the book. Daniel Andler, Mikael Cozic, Brian Hill, Elizabeth Pacherie, Cedric Paternotte, and some very clever graduate students offered useful comments back then and on subsequent occasions.

The main arguments of the book have been tested in several seminars and conferences.

Journal of Social Ontology

Since it would take too much space to mention them all, I thank the members of these audiences collectively. I must also thank Sarah Caro at Princeton University Press for believing in the project and steering it to completion. Special thanks are due to Andrea Branzi, who has generously given permission to reproduce a few drawings from his strange little book, Genetic Tales. Reflexivity and Equilibria, Journal of Economic Methodology 20 , pp.

The Faculty of Philosophy at San Raffaele University provided much-appreciated hospitality during a delicate transition period in —9. I am grateful to all the faculty members and especially to Michele di Francesco and Matteo Motterlini for making it happen. Finally, I would like to dedicate this book to my colleagues in the Department of Economics, Management, and Quantitative Methods at the University of Milan, for their open-mindedness when they welcomed a philosopher of economics to their institution.

Not all rules however are effective. A rule-based account of institutions, therefore, must be complemented by a theory of incentives: institutions are rules that people are motivated to follow. The most important games for the study of institutions are coordination games with multiple equilibria. Behaviors and beliefs are mutually consistent in equilibrium.

Since each equilibrium is a solution to a problem of coordination, coordination games support functional explanations of institutions. Money is an important and fascinating institution, which over the years has become a crucial test case for social ontology. In a correlated equilibrium each individual follows a rule of the form if X, do Y, where X is an event external to the game. This approach is able to reconcile the rules and the equilibria accounts to the study of institutions: conventions are both behavioral regularities equilibria , and regulative rules that guide and constrain the behavior of individuals.

According to John Searle, institutions are systems of constitutive rules of the form X counts as Y in C. The distinction between regulative and constitutive rules however is untenable, because constitutive rules can be derived from regulative rules via the introduction of theoretical terms. Institutional rules create rights and obligations, specifying actions that can or must be performed in certain circumstances.


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These deontic powers may be represented as costs that transform individual incentives in strategic games. This modeling strategy allows the extension of the unified theory to a wider class of games, including dilemmas of cooperation. Such expectations are sometimes based on the observation of public signals, but when public information is scarce we simply simulate the mental processes of the other individuals with whom we interact. Contrary to what some philosophers have argued, many institutions do not require a joint intention or commitment to follow the rules.

The main skill for the creation of institutions is the capacity to identify a solution and to derive the actions to be performed by each individual from it. This kind of solution thinking can be carried out both in individualistic and in collectivistic modes. Many social entities are involved in reflexive loops with the categories that we use to classify them. This peculiar phenomenon can be captured by game-theoretic models where actions and beliefs sustain each other in equilibrium. A category that describes a behavioral regularity may contribute causally to the stabilization of that behavior.

Ian Hacking has argued that social kinds differ from natural kinds because they are interactive. Interactive kinds are as real as natural kinds, often support inductive inferences, and can be studied scientifically.

Many philosophers have argued that social kinds depend ontologically on our representations. The thesis of ontological dependence, if true, would demarcate between social and natural science. It would also imply antirealism and infallibilism about social kinds: the properties of these kinds would not support inductive inference, but they could be known directly and without error by the members of the relevant community.

The thesis of ontological dependence however is false: any social kind may exist independently of anyone holding a correct theory of that kind. There is no guarantee, for example, that people understand what money is, or that the things that people classify as money actually are money. The nature of an institution is determined by its function, not by what people think about it.


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  • As a consequence, we ought to be realists and fallibilists about social kinds. The meaning of institutional terms is determined by the rules that people follow. But what if the rules are unsatisfactory? Can we change the rules without changing the nature of an institution? According to some philosophers we cannot. Thus, for example, we cannot use the term marriage to refer to the union of two individuals of the same sex.

    Understanding institutions: the science and philosophy of living together

    Sally Haslanger has tried to challenge this position introducing normative considerations for the identification of institutions. I argue that we can save realism and reformism by drawing a distinction between types and tokens. While institution tokens are particular solutions to coordination problems, institution types are identified by their function, or the kind of strategic problems that they solve.

    For example, same-sex unions are marriages because they fulfill some of the classic functions of marriage. If I look to the right, I see my colleague Antonio reviewing a paper for a scientific journal. On the left, a map of China hangs on the wall. In front of me, past the door of my office, two students are walking in the corridor of the Department of Economics. You and I, of course, are surrounded by different things. But if we compare our lists, they will have something in common: most of the things that we see are institutional entities.

    An institutional entity is an object with properties or characteristics that depend on the existence of an institution. Antonio, for example, is a colleague of mine because we are both employees of the same university, and the University of Milan is an institution.

    Francesco Guala

    When I drew my list I could have used a different language, describing all the things that I saw in noninstitutional terms. I could have focused on their physical, chemical, or biological properties, for example. But undoubtedly such descriptions would have been incomplete: most of the things that surround us are not just physical or biological entities.