Source
Frank Hindriks and Francesco Guala (2015, online 16 October 2014), “Institutions, rules, and equilibria: a unified theory”, Journal of Institutional Economics 11(3):459–480, LIT-481, read in full in NOTE-395 with the authors’ “Understanding institutions: replies to Aoki, Binmore, Hodgson, Searle, Smith, and Sugden”, JIE 11(3):515–522. The six commentaries were not read.
What was actually shown
Against rules alone (§2). A rule that is known and not followed (a 1799 French ban on women wearing trousers; a 65 mph limit in a 75 mph equilibrium) shows that stating a rule does not make an institution. What does is an incentive structure that keeps behaviour where it is.
Against equilibria alone (§§3–4). Mutual defection in a prisoner’s dilemma needs no coordination, and hare–hare in a stag hunt needs no correlation, so neither is an institution. Pararge aegeria butterflies play a “bourgeois” correlated equilibrium but cannot condition on new signals or invent new equilibria, so they have no institution. Representation is the difference. Property* is modelled as the correlated equilibrium of hawk–dove with first occupancy as the device, expected payoff 1.5 each when occupancy is equally likely.
The transformation (§5).
- [R] If one is the first to occupy a piece of land, one has the right to its exclusive use.
- [B] If a person first occupies a piece of land, then it is her property*.
- [S] If a piece of land is someone’s property*, she has the right to use it.
- [C] = [B] and [S]: “if C then X is Y, and if Y then Z”.
The reduction (§6). The Y term is conservative and eliminable in Belnap’s sense, and behaviour under [R] is extensionally equivalent to behaviour under [B] and [S]. So the constitutive-rules theory is “reducible to” rules in equilibrium. Multiple realisability of institutional kinds corresponds to multiple equilibria. If constitutive rules were necessary, etiquette, and in the reply driving on the right, would not be institutions. By Lewis’s account of theoretical terms, “property” refers if the rules that introduce it are true.
The reply. Normativity needs no constitutive rules: “No one is allowed to use my garden” is regulative, and a right is other people’s obligations. Searle’s “desire-independent reasons” is a platitude on the weak reading and an unargued anti-Humean thesis on the strong one. A theory of institutions should stay neutral among theories of normativity.
What could have come out otherwise. The split could have failed for the toy case, by giving a status rule that says more than [R]. It did not. No harder case was tried.
What this does not say
- That every constitutive rule reduces. The split is worked once (NOTE-395, C4 strong for the toy case); the general claim (C5) is weak–moderate. No case is given where a status is created with no regulative rule behind it, and Searle’s chess appears only as his example.
- That the transformation preserves rights. The equivalence shown is of prescribed behaviour. Whether [R] and [B]+[S] confer the same rights is answered only in the reply, and only by one example (C9).
- That collective acceptance has been analysed. It is read as “whatever set of intentional states is needed for institutions” (§5, n. 14), which lets the “counts as” biconditionals hold by construction.
- Where the human/animal line falls. The representation condition is a stipulation about what “institution” should cover. The reply calls the line a working hypothesis.
- That multiple realisability is multiple equilibria in general. “At least in many cases, they come down to the same thing” (§6; C6 weak).
- Anything about group agents. The account is neutral on collective intentionality (n. 14). Institutions on this view are patterns of individual strategies, which neither require nor exclude a group-level subject.
Connections
- Rival: Searle’s status functions (THEORY-625, LIT-482). The two cannot both be right about what a constitutive rule adds and whether institutions need one. Neither has settled it: this paper reduces one toy case, and Searle’s later free-standing Y terms move toward treating the Y term as a label for powers without conceding the reduction.
- Epstein’s survey (LIT-487, THEORY-487). On the grounding–anchoring framework, equilibrium plus representation is an answer to the anchoring question, what puts the conditions for property in place. The placement is NOTE-393’s, not either text’s. Epstein’s anchors and this paper’s equilibria are rival replacements for Searle’s single form.
- Lewis (LIT-473, unread) supplies both the equilibrium account of convention, generalised here to correlated equilibria, and the account of theoretical terms.
- North (LIT-489, NOTE-392) is the rules account’s exemplar. The objection that rules alone cannot separate effective from nominal rules is one his essay leaves open.
- Tomasello (LIT-125, THEORY-495). The reply lists Gilbert’s joint commitment as one option among theories of normativity; Tomasello’s “we” would be another. The paper takes no side.
Note of 2026-10-24: correlated equilibria without representation
Hart and Mas-Colell’s regret matching (THEORY-941, read 2026-10-24) brings the time-averaged joint play of adaptive players to the set of correlated equilibria with no device, no rule and no representation of one. The correlating device is the shared history of play. What it lacks is selecting one equilibrium and holding it. That makes it a third baseline for this THEORY’s promote_when, between human institutions and animal correlated equilibria. It also supports the THEORY’s condition that what makes an equilibrium an institution is the players’ representing it as a rule.