Methods
Wednesday, January 1, 2003

Thierry Pénard

U. of Rennes

Thierry Pénard

Game Theory and Institutional Analysis

Abstract

This workshop aims to illustrate how game theory can contribute to a better understanding of institutions. I will focus on repeated games that have been broadly and successfully used to explain the emergence and the rationale of institutions. This theoretic framework highlights the role of commitment and reputation to enforce cooperation in repeated relationships (or in“relational contracts” - Gibbons, 2000). Therefore repeated games allow to rethink institutions as cooperation-enhancing devices. Applications to merchants guilds in the medieval Europe (Greif, Milgrom and Weingast 1994) and to professional associations in oligopolistic markets will be presented.