Understanding Institutional Diversity Ostrom 2005

This is a book by Ostrom outlining her approach to analyzing and designing institutions. She will be assigning it in the class in the Fall. It uses results and evidence from everything from lab work, field work and game theory, and she introduces a sort of syntax as well.

• p.23:

A key assumption made in the analysis of a competitive market is that the outcomes of an exchange are highly excludable, easily divisible and transferable, and internalized by those who participate in the exchange. Markets are predicted to fail  as effective decision mechanisms when they are the only arena available for producing consuming, or allocating a wide variety of goods that do not meet the criteria of excludability, divisibilty, and transferabili5y.  Market failure means that the incentives facing individuals in a situation, where the rules are those of a competitive market but the goods do not have the characteristics of "private goods," are insuffiicent to motivate individuals to produce, allocate, and consume these goods at an optimal level.

• p.24

• p54 The number of times a game will be repeated, and if that number is known, and whether a player can opt out, will affect liklihood of cooperation and defection in a game. This is a theoretical result, and seems like an artifact of the model, but has support in lab studies.

• p54 "For asymmetric social dilemmas...there is no single, simple heuristic...that can be successfully employed to reach the higher joint outcome. This is due to the fact that the first player can simply stay with the status quo, and what the second player would do is irrelevant." My note here was 'don't see it' but I think I do now. I'd be interested in the connection of this to 'crowding out'.

• p55 "rule-governed competition" Deep.

• p67 "resilience is defined as the amount of disruption needed to transform a system from one stability domain to another (Holling 1973, Gunderson and Holling 2001)"

• p74 Empirically supported trust issues in Bulgaria. Could be interested case study for building the rule of law.

p77 Bruno Frey (1994, 1997a) on the external sanctions crowding out reciprocity

• p78 "The game seems to simple for some scholars. 'All one needs to do is create a form of contrat law,' they say..." Who are these 'they' and where are their own words?

• p80 Ostrom teases with the statement that tools for analyzing common-pool resources can be applied to the Internet