Coordination problems are pervasive in economic and social interactions. In a variety of settings, “institutions” have emerged to address these problems and allow more efficient outcomes. In this workshop, I will review how simple game theoretic tools (such as the prisoners’ dilemma) have been used in the literature to address different aspects of this process, and what insights we have gained from this literature. These aspects include (see more references in Sánchez-Pagés and Straub, 2007):

• The way institutions function (Milgrom et al. 1990; Greif 1993);
• The fact that different types of institutions (e.g. formal and informal ones) can coexist (Dixit 2004);
• Social capital, understood as a form of informal institutional arrangement (Durlauf and Fafchamps 2006)
• The emergence of institutional coordination mechanisms (Sánchez-Pagés and Straub 2007).